What cyber insurance means for business partnerships

We get it. No one wants to buy more insurance than they have to; we laugh off many of the insurance offers we get, but since we started talking about the growing need for cyber insurance in 2014 and how cyber insurance is going to increase security in 2015, it has become a necessity.

Why cyber insurance: Cyber insurance statistics

There is no shortage of information out there proving why you need cyber insurance. When government organizations and some of the biggest tech leaders can get hacked, we all need to accept that it will probably happen to us at some time. To increase the threat, we are constantly adding new risk factors. For example, we are adding new IoT devices every day, letting more devices in the workplace and using a growing number of third-party companies to help us manage all things information security.

Here are the statistics that show the growing need for cyber insurance:

• 91% of respondents have business interruption and data restoration protection
• 54% have coverage for expense reimbursement – PCI fines, breach remediation/notification and extortion, among others
• 52% have employee or insider threat liability coverage
• 35% are seeking coverage against loss of sensitive data caused by software coding and human errors

Cyber insurance: Our current best hope

Simply and powerfully, the U.S. Treasury summed up our industry’s future at a G7 finance meeting: “There are many institutions and many countries who think they can just wait for the perfect technology, a silver bullet to make these issues go away. But they’re not going away.”

For this reason, we need to employ other ways of protecting ourselves from the financial ruin a data breach can impose on a company. As of now, our best solution is the one that saves us from all other forms of financial ruin – insurance.

You can read our previous blog post on tips for buying cyber insurance and what it covers, but what we want address now is how having or not having cyber insurance affects your business beyond the obvious.

Cyber insurance and business partnerships

It is time to reassess all the third-party businesses you work with to ensure they have cyber insurance. Even if you have cyber insurance, it likely does not cover data lost by a third-party. If a third-party gets hacked and that is how a hacker gets into your system, you are in just as much trouble as you would be without insurance. Studies show it is a common way hackers gain entry to a system – they start with the weakest link.

Before ever doing business with a third-party, ask the question: “do you have cyber insurance?”

Speaking of asking questions, cyber insurance could be the difference between you securing or losing a new client. Your clients’ security teams are reading the same articles as you and know that cyber insurance has become a must-have. If you don’t have it, you could be losing business.

Cyber insurance has emerged as a must-have for a multitude of reasons, so why don’t you have it yet?