The advancement in technology is increasing at a rapid pace. Unfortunately, data breaches have become a common occurrence, so companies are being offered cyber insurance. When cyber insurance was first introduced, businesses declined it because they were confident their networks could not be penetrated. However, high profile breaches became frequent, so companies are now seeking cyber insurance.
The insurance helps company against huge losses that are occurring from cyber-attacks. For example, five individuals were charged with pilfering millions of credit card and debit card numbers from major corporations. It was considered the biggest data breach in the history of Canada.
A breach can cost companies millions of dollars. After the violation, companies have the unpleasant task of calling customers to notify them of the infringement. As expected, customers are not too happy for the inconvenience. The businesses are forced to offer customers credit protection. They must also hire lawyers to defend against lawsuits.
The amount of cyber insurance policies purchased has significantly increased. Insurance brokers are finally convincing clients that the insurance is necessary. Some of the businesses that really benefit from the insurance include hotels, restaurants, educational institutions, healthcare services and online retailers. Banks and other financial institutions also collect a high amount of personal and financial information.
Companies are discovering that they are not as protected as they thought they were, so they are taking measures to improve security. Even with the improvement of cyber insurance in Canada, the country remains behind Europe and the United States. Companies in Canada are not required to report breaches in data, so it can be difficult for brokers to know how much a breach will cost and how much to charge for their policies.
Most lawsuits are settled out of court, so they are not available to the public. However, there are numerous class action lawsuits that are currently being pursued; therefore, the insurance is becoming essential for businesses.
Recent tools are creating new problems with security, so brokers are trying to determine what risks they need to help their clients insure against. Technology is making life simpler, but it also creates new dangers in the world of cyber-attacks.