The detrimental repercussions of cyber attacks on companies abound. Not only do they damage reputations and diminish trust, they also can lead to the permanent loss of valuable intellectual property, the mass release of sensitive information and drastic revenue loss, as companies often must temporarily take operations offline, or pause operations entirely in order to remedy the situation.
It’s safe to say that cyber attacks can cause more damage to companies than many disasters historically covered by insurance, such as fires, natural disasters and robberies. However, although companies may be aware of the severity of the cybersecurity issue, they are often unaware of how to protect themselves in the event of an attack and hesitant to accept cyber insurance as a necessity. According to The Financial Times, “business leaders overestimate by a factor of five how well covered they are by insurance” if faced with a cyber attack.
This lack of knowledge is not only harmful to companies, but also hinders cyber insurance firms’ ability to best serve their clients. Cyber insurers are often incapable of identifying careless clients from judicious ones, and therefore cyber insurance premiums have been roughly six times higher than property insurance. The industry still needs much collaboration, research and development to be entirely successful and reasonably priced.
The cost is a natural deterrent for CEOs and business leaders with the bottom line in mind. Cyber insurance, like other types of insurance, should be generous enough so that those who cannot afford the steep costs but are still prudent with their cyber practices are not penalized for their lack of available funds. However, it should also be sparing enough to promote responsible cyber security practices at all times.
HOB knows the risks and damages of cyber attacks on businesses and aims to be on the proactive side of this risk management, offering secure remote access solutions for corporate data. Companies employing HOB’s solutions will ideally benefit from decreased cyber insurance premiums because of the high security standards they have in place.
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