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Survey Shows Nearly 70% of Businesses Target of Hacking

Cyber Liability Coverage An Integral Component of the Insurance MixHartford Steam Boiler Inspection and Insurance Company (HSB), part of Munich Re, recently released its findings from a cyber survey of businesses of risk managers and found that close to 70% of businesses have experienced a hacking incident in the last year. Moreover, half (55%) of the risk managers surveyed don’t believe their company is dedicating enough money or trained and experienced personnel to combat the latest hacking techniques. The organizations represented by the risk managers responding the HSB’s survey included 63% at large enterprises, 30% at mid-sized organizations and 7% at small businesses.

“Hackers have evolved and so have their methods of attack,” said Eric Cernak, Cyber Practice Leader for Munich Re in a press release. “Businesses are on high alert, but they can do a lot better. Simply reacting to new threats is not enough. Businesses of all sizes need to anticipate hacking trends and deploy the resources necessary to protect their private or sensitive information.”

Other key takeaways from the survey include:

  • Loss of confidentiality of information is viewed as the biggest risk (76%), followed by service interruption (16%) and government intrusion (5%)
  • Concerns regarding the type of information being breached ranged from personally identifiable information (53%) to sensitive corporate information (33%) to financial information (14%)
  • When asked about the type of risk management services they would be most interested in deploying to combat cyber risk, risk managers indicated intrusion detection/penetration testing (32%), employee education programs (25%) and encryption (25%)

Most troubling is that 36% of businesses do not have any level of cyber insurance coverage. This lack of coverage continues even in light of the publicity that cyber attacks and data breaches garner every day and the risk businesses face of financial loss, reputational damage, business interruption and other exposures.  According to IBM, the cost incurred for each lost or stolen record containing sensitive and confidential information increased six percent from 2013 to 2015 from a consolidated average of $145 to $154.

Cyber liability coverage is an essential component of any comprehensive insurance program today. It is designed to cover the cost of conducting an investigation into a breach, notifying customers, regulatory fines, reputational and crisis management, lost business and the cost of credit monitoring. Policies can also be designed to respond to lawsuits as a result of a breach.

Not all cyber policies are alike and premiums vary depending on what is included in the coverage. Axis Insurance Services is a specialist in cyber liability insurance and can provide you with a policy that meets your risk provile. Give our specialists a call at (877) 787-5258 to find out how we can help you protect your business from this emerging risk.

 

Sources: HSB/Munich Re, IBM

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Blogged on: June 22, 2015 by Mike Smith
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