Unless you have been permanently vacationing in a remote area of world, reports of new cyber security breaches are a part of your daily news feed. The hacking and hijacking of our government, schools and businesses computer systems has been increasing at an exponential rate. Just this past Friday a widely used customer management system was hijacked, one used by thousands of smaller businesses in which they encrypted the files of the providers customers simultaneously. No size business, big or small, is escaping the threat posed daily by the sophisticated hackers – often using bots. Bad bots are big business, with cybercriminals around the world using them to fraudulently access accounts, attack networks, and steal data. Unfortunately, botnets are growing more popular among cyber criminals because they are very cheap to set up, can target thousands of businesses (really they are targeting your unsuspecting employees, or those not trained properly to look for phishing emails) and can offer extremely lucrative ransom or theft rewards.
The cyber security insurance marketplace has reacted quickly to this dramatic increase in risk exposure and claims. Some carriers are dramatically limiting certain industries/classes in which they are offering new or renewal coverage. Many carriers are now requiring two factor authentication in order to quote a new risk or even offer renewal pricing terms. In the aggregate, these claims as with all insurance will be factored into future premium pricing.
Some alarming industry specifics:
- Social engineering claims were up over 400% in 2019 and were up over 2000% in 2020
- Ransomware (holding the client system hostage for a denial of service until a ransom is paid) was up over 500% in 2019 and up over 3000% in 2020
- Computer fraud and hacking was up over 50% in 2019 and over 500% in 2020 last year
- One of the leading cyber carriers paid $2.5 billion in social engineering claims in the US alone since 2019.
- Ransomware payments, paid mostly in Bitcoin, exceeded $4 billion
- Worldwide cybercrime costs will hit $6 trillion annually in 2021 and projected to hit $10.5 trillion annually by 2025
What can you do:
- If you don’t have a cyber security policy, make it a priority to look into it
- If you do have a cyber security policy, be prepared for more thorough questioning on your application at renewal with the very real possibility of needing to have implemented two factor authentication. Find out what value-added services may be part of your policy which can help you from being hacked in the first place
- Consider hiring a white hat hacking service to perform a penetration test of your system
If you wish to have a Cyber Security Insurance Policy Review through our consulting services, please contact us.