Is cyber-liability insurance a must have for today’s enterprise? How should an organization go about evaluating adding this type of policy to their other stable of risk management vehicles? Let’s take a look at the current market and a few of the questions that need answers before a company invests in a cyber-liability policy.
Cyber-liability insurance is gaining in popularity as a supplement to Commercial General Liability policies (CGL) and could be a good investment for a business looking to hedge their risk. The ROI for this type of policy would have to be weighed against the business model, the data stored and the potential damages they could incur in the event of a data breach. Companies in the healthcare and financial sectors should seriously consider obtaining one of these policies due to the regulatory burden and potential non-compliance penalties these industries face.
Is the cost worth it?
Currently, the cost of cyber-liability policies are quite low. However, with a record number of data breaches in 2015, the cost of these policies is climbing quickly. However they are still quite reasonable. Based on a small breach of 100,000 client records, an enterprise would pay nearly $50k in postage for sending notification letters alone. Most cyber-liability premiums, based on revenue, size and industry hover between $1500. Large multi-billion dollar firms may pay up around $50,000. [Read more…]