We have all heard of the data breaches of Target, Home Depot, JP Morgan, IRS and more recently T-Mobile. Hackers are constantly looking for ways to steal your client’s sensitive data. Even though these multi-billion dollar corporations have the financial wherewithal to survive such a malicious data breach, the costs of recovery is substantial. The vast majority of small businesses face the same cyber risks as these multi-billion dollar corporations, yet do not have the resources to recover. In fact, a data breach of a small business will likely put the business in bankruptcy. Claims from clients, vendors, financial institutions, and regulators can reach hundreds of thousands of dollars.
Cyber risk is costing the global economy $445 billion annually, $108 billion of which comes from the U.S., according to a new report. “Cyber risk is now a major threat to businesses,” Allianz said in the report. “Companies increasingly face new exposures, including first-and third party damage, business interruption and regulatory consequences.” AGCS said the problem has become severe only in the last 15 years, though it has a particularly severe impact on the world’s top economies. Out of the $445 billion annual global cost, $200 billion-plus of that number comes from the world’s largest economies — the U.S., China, Japan and Germany. The top 10 global economies account for more than 50 percent of cyber crime costs, according to the report. AGCS said that cyber risk remains the most underestimated by businesses.
Most commercial insurance policies exclude cyber risk or data breach coverage. Some business owners polices include a limited endorsement of data breach coverage for a small premium. Check your current policy to make sure you are covered. Cyber Risk is real and Cyber Risk Insurance can help with recovery if your client’s sensitive data is ever compromised.
Cyber Risk….Who Cares?….Your Clients Care!