Clearsurance study reveals the importance of cyber insurance

With our reliance on technology growing stronger and stronger, businesses have had to adapt. These days, businesses store their data on computers and the internet. These great tools provide a lot of benefits but also expose your business to cyber crimes. 

In Clearsurance’s study, it is predicted that by 2025, the total damage from cyber attacks will reach $28 billion. If you are a business owner, you may be wondering how you can protect your business. This study found that the best way to protect your business is to invest in cyber insurance. This type of insurance was made to cover the costs that come from cyber attacks. 

What does cyber insurance cover?

Buying cyber insurance — or, as it is also known, cyber liability insurance — secures your business and protects against the risks and costs that come with these types of attacks. 

If you are one of many businesses that have turned to storing information online, Clearsurance recommends considering a cyber insurance policy. Cyber attacks are possible, and these days you could be at risk of having private customer and business information compromised, which could also put you at risk for identity theft. If your business is involved in one of these leaks, it could later be involved in costly lawsuits. 

Clearsurance mentions that this insurance provides coverage in a variety of ways. Depending on the type of policy you purchase, you could be covered for the costs of investigations, settlements, data recovery, interruptions to your business, and any legal fees that can arise. This study notes that there are a lot of insurance companies in the cyber insurance market and many come with different policies.

Cyber Crimes Are Increasing

As more people and companies turn to online resources, cyber criminals have more people to target. Clearsurance found that in 2020 alone, over 5 billion people had access to the internet. This study estimates that by the year 2031, businesses and people will be attacked with some form of cyber attack every two seconds.

Clearsurance saw that with the pandemic, more people started working from home, which increased the risk of cyber attacks. Although working from home provided people with many benefits, it also increased the opportunities for data to be shared over many different apps and cloud services, which are helpful but create very vulnerable online spaces.

With the rise of remote work, having good cybersecurity has been difficult for businesses. These days, it is not just computers at risk, but also smartphones, tablets, and cloud services. This puts every aspect of someone’s private information at risk.

The availability of remote work and the number of people opening businesses from their homes continue to rise. As a result, there needs to be more protection. Those running businesses out of their homes need home-based business insurance. Those using cloud services need to increase email security as phishing has become the biggest entry form of cyber attacks.

Clearsurance Notes Businesses Are Not Prepared for Cyber Attacks

A lot of businesses fall short in preventing attacks even with some security in place. This leaves them vulnerable while they believe they are protected. The most commonly used tools are the ones that are most easily attacked. Clearsurance lists that even two-factor authentication, password manager apps, and the use of “strong” passwords may not be enough to prevent security attacks from occurring. 

The effects of cyber attacks on businesses can be devastating. It could come to be a complete loss for a business. Clearsurance’s study saw that cyber attacks often target small to midsize companies. When these businesses become victims of an attack, 60% of them do not last past a few months as it becomes too costly for the business.

Cyber Insurance Costs

When it comes to estimating the costs of cyber insurance, Clearsurance states that it largely depends on your business’s cyber risk and how much coverage you need. There are also other factors including the type of business you have, how much and what type of data you are storing, your network security, who has access to your data, and a business’s past claims history.

There are various types of cyber insurance companies out there. Clearsurance mentions that your rates can depend on the cyber insurance company you choose. 

The Importance of Cyber Insurance

The latest insurance trend to protect you and your business is cyber insurance. Though this insurance cannot prevent ransomware and cyber attacks from happening, cyber insurance can provide a defense against those looking to hurt you and your business. 

Read Clearsurance’s full study and learn more about cyber insurance: What is cyber insurance and why is it important?