The cyber insurance market grows each year both in size and import but is insufficiently understood and served by insurance providers, who so far have few technological options to contain, predict and address cyber risk. This is not to say that there is not coverage out there to aid in mitigating risk for your enterprise. For the veteran business owner there seems to some form of cyber risk evolving into all types of operations.
Estimates for the yearly cost of cyber crime vary from $330 billion to $506 billion. The cost will increase as businesses and their supply chains become more digitally integrated. Digital integration seems to be the trend for all businesses that want an effective marketing strategy. In the past three years, the average economic impact of cyber crime per organization in the U.S. has risen from $11.6 million to $15.4 million. The biggest share of this impact comes from the cost of business disruption. A disruption in business in many cases for the small business owner can mean falling behind and not being able to recover. The global market for cyber insurance is estimated to rise to $20 billion in premiums by 2025.
The risk is clear, but why do many businesses not have coverage?
Businesses are insufficiently insured and informed around cyber risk. Around 40% of Fortune 500 businesses currently have insurance against cyber incidents, but generally not enough to cover their full exposure. In the U.S., 24% of all business have some form of cyber insurance. 48% of enterprise customers say they lack the necessary understanding of the complexity of cyber risks to better prepare against them. This is where an insurance professional is needed to fully explain the threats and the need for coverage.
Of the 10 largest insurers, only five offer standalone cyber coverage. While 90% of all insurance underwriters offer cyber insurance as an add-on to other products, more than 50% do not have any dedicated underwriters for cyber risk and rely on underwriters for other lines. Consequently, 70% of insurance brokers claim there is little to no clarity about what is covered in cyber products.
Seeking out a carrier that has distinct coverage’s for Cyber threats can be paramount to the lasting success of your Veteran owned business.
To learn more about Cyber Liability, please contact me at 803-250-3709, or in the web at www.insuranceforvets.com.