Cyber insurance is a fairly new market that gives people and businesses some protection and compensation if they hit by cyber attacks. Though cyber insurance is helpful in many ways, including getting businesses recover. The danger is when cyber insurance pays something like cyber ransom, that could help fund the next round of attacks.
Who gets affected?
There are three types of businesses.
- Those that have been hacked
- Those that don’t know they’ve been hacked
- Those about to be hacked
A new report has found that the cost of cyber insurance policies is soaring. Why is that?
The General Accountability Office (GAO) has noted a significant increase in the cost of cyber insurance policies. They have found that adoption rates of cyber insurance policies is increasing dramatically, with coverage increasing from 26% in 2016 to 47% in 2020 and growing.
The most significant problem which leads to this sudden cost increase is ransomware and the lengthy disruption that encrypting attacks and the theft of data can have to compromised schools, hospital networks, employees, and students.
The authors of the report found that “the industry sectors with the highest take-up rates in 2016-2020 included education and health care, which collect, maintain, and use significant amounts of personally identifiable information or protected health information.”
However, the real cost of Cybercrime is your organization’s reputation, customer base, and the ability to function, but the cost of poor cybersecurity is never clearer than when looking at the money your organization tend to lose.
Another concern from the experts - is that hackers are looking at who has cyber insurance and specifically attack them. They might think that you will be more likely to pay if you have insurance.
Cyber insurance is a good thing, if it’ll help strengthening systems and solve problems, that’s a valuable thing. Many experts believe if it’s used to pay criminals and pay ransoms, that might unfortunately help fund future attacks, and that’d be a bad thing.