Top 3 Reasons Firms Are Buying Cyber Insurance

Risk managers purchasing cyber insurance cite reputational harm, business interruption and data breach response and notification costs as the chief exposures they are trying to address.

The Risk Management Society (RIMS) recently conducted its first cyber survey. The survey featured input from 284 RIMS professional members in the U.S. They represented a range of industries with an excess of $1 billion in revenue (58 percent).

The top three first party cyber exposures these risk managers cited are:

• Reputational harm (79 percent)
• Business interruption (78 percent)
• Data breach response and notification (73 percent)

The survey results also offer a look at their cyber insurance buying practices:

• 51 percent of respondents purchase stand-alone cyber insurance policies.
• 58 percent of those with cyber insurance policies carry less than $20 million in cyber coverage, while 49 percent of those are paying over $100,000 in premium.
• 74 percent of those without cyber coverage are considering procuring coverage in the next 12-24 months.
• 77 percent of respondents credit enterprise risk management for identifying cyber risk.

“It seems like every day risk professionals are confronted by new cyber attacks and forced to take immediate action to protect their organizations before it is too late,” said RIMS President Rick Roberts. “The key to successfully mitigating the impact of a cyber breach – or even preventing one in the first place – is knowledge.”