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Volume 30, Issue 1

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Monday, 02 December 2013 17:12

Cyber Coverage a Must? Coverage Lapse Costing Big Bucks in Data Breaches

Cyber attacks have become a top concern for businesses in 2013, with 85 percent of corporate executives naming it their greatest risk – but surprisingly, less than 20 percent of companies purchase cyber insurance for protection against this increasingly common cause of loss.[1] As cybercriminals begin employing more sophisticated tactics, cyber insurance is becoming a necessity; companies hit by hackers could be held accountable with class actions in court for large-scale data breaches.

Cyber insurance is available to everyone and is designed to mitigate losses from a variety of cyber incidents, including data breaches, network damage and cyber extortion. The Department of Commerce has deemed cyber insurance an “effective, market-driven way of increasing cybersecurity” because it may help reduce the number of successful cyber attacks by promoting widespread adoption of preventative measures, encourage the implementation of best practices by basing premiums on an insured’s level of self-protection and limit the level of losses that companies face following a cyber attack[2].