Business Insurance

Cyber insurance benefits become increasingly clear

A recent RIMS survey revealed that companies are purchasing this coverage at a growing rate.

The RIMS Cyber Survey 2015 has been released and what it has revealed is that 51 percent of the members of that Risk Management Society have purchased stand-alone cyber insurance policies in order to protect them from the threats associated with data breaches and other digital invasions.

It is clear that the steady stream of data breach news headlines is starting to impact the perceived risk.

In order to better understand the risk management strategies that have been implemented among its members, RIMS has now conducted its first cyber insurance related survey, which investigated the coverage investments that have been made, the exposures that remain present, the ownership of cyber security, the involvement of the government, and the procedures that are in place for identification and response to these issues.

The cyber insurance survey involved the participation of 284 professional members of RIMS in the U.S.

cyber insurance agentMost of the respondents (58 percent) to the survey represented organizations that generate over $1 billion in revenue. They represented a broad spectrum of different industries, where the largest was in manufacturing (16 percent) followed by financial services (13 percent).

Among the key findings of the insurance coverage and data breach risk survey were that 51 percent of respondents have purchased stand-alone policies to protect them from that threat and the damages associated with such a digital attack. Among those with cyber policies, 58 percent have under $20 million in coverage, while 49 percent are paying premiums that are higher than $100,000.

Among those that do not have cyber insurance coverage, 74 percent are considering purchasing a policy within the next 12 to 24 months. Among the reasons that all of the organizations currently covered or considering coverage feel that the protection is most important is to cover against reputational harm (79 percent), business interruption (78 percent), and data breach response and notification (73 percent). According to Rick Roberts, the president of RIMS, “It seems like every day risk professionals are confronted by new cyber attacks and forced to take immediate action to protect their organizations before it’s too late.”

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