As reported in Canadian Underwriter, Vishal Kundi, CEO of BOXX Insurance foresees cyber insurance will become mandatory as it becomes vital to most countries' economic health. Kundi cited an estimate by Cybersecurity Ventures that global cyber crime will reach $10.5 trillion annually by 2025
In Canada, a survey of 300 small businesses this year found 41% had suffered a cyber attack costing at least $100,000, compared to 37% in 2019. However, only 24% planned to purchase cyber insurance.
Kundi lists four reasons cyber insurance could become as mandatory as workers compensation:
- Cyber insurance is the core of a digitally resilient, healthy business sector. Over 60% of small and medium size businesses fail after a cybercrime.
- Governments will see cyber liability, or at least data privacy liability, as a necessary shield against privacy breach in the same way workers compensation insurance is a shield against the cost of workplace accidents.
- As governments crack down on ransomware attacks the exposure will become more manageable (the jury is still out on this).
- Cyber insurance eligibility requirements will lead to improvements in cyber security.
With over 50 jurisdictions regulating insurance in the United States, it is a safe guess cyber insurance will not become mandatory in the foreseeable future. As long as cyber liability is not required in contracts many businesses may not see it as necessary. But with a data breach or ransomware attack more likely than a fire, it makes sense that every organization that uses computers should have insurance in place.
If you still don't have cyber insurance, contact Beacon Insurance Services while this post is still on your computer screen.