Cyber insurance underwriters are focusing more and more on an organization's resilience. The most common definition is the ability of an enterprise to limit the impact of security incidents. (Credit: vectorfusionart/Adobe Stock)
Many small businesses underestimate the potential for cyber risk and have inadequate coverage (or none at all) to protect them from cyberattacks. Ransomware attacks are on the rise and are a serious threat to the nation's economy, infrastructure and national security. In 2020, the estimated cost of ransomware attacks on both public and private institutions in the U.S. was $19.5 billion, according to a report by the U.S. House Committee on Oversight and Reform. The average cost of a data breach, IBM Security reports, increased from $3.86 million to $4.24 million from 2020-2021.
|Concerns of cyberwarfare
This situation has only compounded the already challenged cyber market trying to keep up with ransomware claims. Russia's invasion of Ukraine has heightened insurers' concerns over the potential for big losses from both government-sanctioned attacks and vigilante hackers. Already, insurers have responded to the increased frequency and severity of cyber claims by raising premiums, increasing deductibles, restricting policy language, reducing coverage limits and implementing stricter underwriting requirements with high levels of risk management requirements and compliance measures. Still others have exited the cyber market entirely.
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