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Scrutiny ratchets up of companies' cyber insurance, practices

Underwriters now take a fine-toothed comb to commercial cybersecurity practices, and regulators are starting to do the same.

By Walter Andrews, Andrea DeField and Sima Kazmir | January 18, 2022 at 12:05 AM
Companies should expect that regulators and agencies will be more active role following a cyberattack. Fortunately, despite reductions in coverage, insurance can help mitigate costs arising out of a cyberattack, as well as defense costs incurred for claims from a cyber incident. (Credit: Shutterstock.com) Companies should expect that regulators and agencies will be more active role following a cyberattack. Fortunately, despite reductions in coverage, insurance can help mitigate costs arising out of a cyberattack, as well as defense costs incurred for claims from a cyber incident. (Credit: Shutterstock.com)

By June 2021, the total value of suspicious activity associated with ransomware transactions for the year exceeded the total value reported during the entirety of 2020, according to the U.S. Treasury Department.

Though standalone cyber insurance policies are new in the industry, they have grown in the last decade to account for increased risks and corresponding insurer and regulatory scrutiny. According to a December 2020 National Association of Insurance Commissioner’s Report, premiums in cyber policies totaled $3.15 billion, doubling since 2015, and demand for standalone policies increased 24%.

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