Filed Under:Claims, Litigation

After ‘Year of the Data Breach,’ Carriers Increase Capacity, Competition for Cyber Risks

With 30+ insurers now writing the risk, limits are touching $25 million, with layered coverage up to $300 million; insurers predict business will increase 20 to 30 percent in 2012

There’s a good reason why 2011 is known among security professionals as the Year of the Data Breach.

The antics began in April, with a bold, high-profile data raid on Sony’s Playstation Network database—and ended with hackers scamming credit-card details, passwords and home addresses from the systems of intelligence-analysis firm Stratfor in December.

How much liability? A study of paid cyber-insurance claims, compiled in 2011 by NetDiligence, reported an average incident cost of $2.4 million.

However, the most recent annual study of data loss by the Ponemon Institute—which took into account detection, notification, post-response and lost-business costs—puts the average full cost of a data breach at a whopping $7.2 million.

As a result, Herendeen adds with some understatement, “There is a pretty large growth potential.”

CARRIER COMPETITION HEATS UP

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