Cyber Insurance Premiums Drop: Businesses Upgrade Security
According to a report, cyber insurance premiums are dropping globally as businesses strive to improve security in an effort to curb their losses from cybercrime, even amidst the rise of ransomware attacks. While cyber insurance premiums skyrocketed in 2021 and 2022 amidst the pandemic, premiums have been dropping in the past year.
This Pacific Prime UK article will discuss the dropping cyber insurance premiums as businesses improve security against cyber attacks.
What is Cyber Insurance?
Cyber insurance, also known as cyber liability insurance, is an insurance policy that companies purchase in hopes of reducing cyber risks associated with conducting any form of online business.
Coverage Areas
Cyber insurance covers the company’s liability for most data breaches resulting from cyber security incidents. These include any loss or theft of electronic data that can negatively impact your business by causing a loss of confidence in your company that results in a distrustful customer base or potential financial losses from recovering from the cyber attack.
Below are areas cyber insurance can help cover.
- Legal fees
- Affected customers’ personal identity restoration costs
- Compromised data (such as ransomware cases) recovery costs
- Compromised computer system repair costs
- Possible customer data breach notification costs
Who Needs Cyber Insurance
Businesses that create, store, or manage electronic data online will need to invest in a cyber insurance policy. This is because sensitive customer data such as phone numbers and other personality identifiable information such as credit card numbers, and sales records are targeted by cybercriminals in the digital age.
It’s also a good idea for e-commerce businesses to consider investing in cyber insurance policies as downtime from ransomware or other cyber attacks can be detrimental towards a business’ financials.
What Cyber Insurance Doesn’t Cover
While cyber insurance covers legal fees, along with data recovery or system repair costs, there are some key areas excluded by cyber insurance that companies should know. Some of these areas not covered by cyber insurance include pre-existing breaches or cyber events caused by employees.
Below are the areas that cyber insurance doesn’t cover.
- Pre-existing breaches or cyber events that occurred prior to purchasing a cyber insurance policy.
- Cyber events caused by employees and insiders.
- The cost of improving the company’s technology systems, such as new application costs and security system upgrades.
- Infrastructure failures resulting from external factors other than purposeful cyber attacks.
- The company’s failure to fix any known vulnerabilities such as unpatched softwares. Should any vulnerability be discovered, and the company fails to address the issue, the cyber insurance policy may not cover those vulnerabilities.
The Falling Cyber Insurance Premiums
In a recent report on Monday, July 1st, 2024, cyber insurance premiums are falling worldwide as businesses strive to improve their cyber security against cyber crime, even amidst the rise of ransomware attacks.
While cyber insurance premiums rose in 2021 and 2022 where the COVID-19 pandemic drove cyber incidents, premiums have been dropping in the past year and the cyber insurance market saw double-digit price reductions in 2023/2024.
For instance, increased security such as multi-factor authentication (MFA) has helped companies reduce insurance claims by further protecting the company’s data and lowering the company’s susceptibility to cyber threats. The report also added that smaller firms, however, are less likely to secure cyber insurance due to the lack of awareness of cyber risks.
Conclusion
Thanks to companies’ increased awareness of cyber risks and their efforts to improve data security, cyber insurance premiums have dropped. Regardless of the organization’s size, however, cyber insurance is worth investing in.
This is because with the right policy, companies will not have to pay out of pocket for data recovery or system repair costs on their own, allowing them to considerably save costs in the long run. It’s also worth considering methods to increase cyber security such as multi-factor authentication to further protect the company’s data.
While cyber incidents can happen at any time, you can always craft a safety net for your company with a business insurance plan. Having the right business insurance plan can not only help cover employees’ medical bills in the event of medical emergencies while abroad for business trips, but also cover property, liability, and cyber incidents.
Even though sifting through and comparing multiple business insurance policies can be daunting, especially with multiple to choose from at varying price points, it doesn’t always have to be a nightmare and we’re here to help you.
As an experienced international health insurance broker and employee benefits specialist, Pacific Prime UK can not only help match both expats and locals to their health insurance plan of choice, but also offer efficient employee benefits solutions to ensure employees’ voices are heard.
What’s more, if you secure insurance or employee benefits solutions with us, we can go the extra mile by helping you with completely impartial advice at no additional cost. If you have any further questions, please get in touch with us. Or, if you would like to compare plans from multiple insurers, click here to get a free quote.
He graduated with a Bachelor’s Degree in Communication Arts, Media & Communication major (concentration: Creative Content) from Mahidol University International College (MUIC). During the compulsory major elective period in the summer of 2021 and voluntarily during the summer of 2022, he also interned as a video and photo editor at Mbrella Films.
He has experience working as an English Content Writer at a real estate buying/renting/selling platform in Thonglor. There, he crafted company blog posts on a multitude of topics. Topics include market trends, legal issues and disputes in property businesses, financial guides, expat guides, home insurance, home decoration and maintenance, and weekly real estate news quick-recaps. Occasionally, as part of the blog-writing process, he would also translate existing Thai blogs to English.
In his free time, Guy enjoys doing scriptwriting and storytelling for comic strips, watching movies, and listening to music (particularly film scores).
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