In 2020, one of the largest data breaches in history was committed against several companies and authorities, including the network management software company SolarWinds. Approximately 18,000 of SolarWind's customers were affected. It was a large and prolonged attack, and the full effect is still ready.
Cybercrime explodes and it is one of the biggest risks that entrepreneurs face today. In the first half of 2019 alone, more than 4.1 billion business registers were exposed according to the 2019 Data Breach QuickView Report by Risk Based Security. And since the COVID pandemic began, cyberattacks have increased by nearly 400 percent, with 68 percent of companies reporting an increase in fraud, according to the FBI.
SolarWind's Impact on Cyber Insurance Companies
The SolarWinds attack was a disaster from a national security standpoint. But the insurance industry seems to have avoided a potentially very expensive bullet. Insured losses are estimated at $ 90 million, according to a joint financial analysis by BitSight, a security rating agency, and Kovrr, a leader in data-driven cyber-risk modeling. Not a small event, but it could have been so much more catastrophic.
In recent years, the SolarWinds attack and other major cyberattacks have continued to have a decisive effect on the insurance industry and, in turn, on cyber insurance levels and coverage. for entrepreneurs. And the threats continue to evolve.
Not only does the threat increase but also cybercrime targets develop. Not so long ago, large companies were the preferred target for ransomware and other hacking by malicious hackers. In 2014, large retailers such as Target, Nieman Marcus and Home Depot were hit hard. In 2015, there were major care providers such as Premera Blue Cross and Anthem.
In response, large organizations began to strengthen their cybersecurity infrastructure and became more difficult targets. So today, hackers have turned to smaller, less well-protected companies. And the threats go beyond the computer risks. Like large companies, medium-sized and small companies also risk major disruptions, the ability to make money and the ability to function successfully.
Today, companies of all sizes should have cyber insurance. Ransomware attacks skyrocket and many claims (even for small businesses) start at $ 1 million. Can you imagine having to pay that much to regain access to your own systems? Can you imagine having to negotiate and create a cryptocurrency account to pay the ransom without an experienced insurer advocating for you? This is not a scenario you want to be a part of.
What's in store for employers?
Cyber risks are evolving so fast that the insurance industry is climbing to keep up. In short, the industry is experiencing growing pains that will affect employers in many ways, including the following:
- Insurers are changing the way they insure policies and may be less forgiving of lax cybersecurity measures.
- Prices change constantly as Cyber Risk Policies adapt to rapidly evolving risks.
- The insurer's appetite for risks changes and the "right fit" of a cyber insurance company will vary depending on your industry, company size, location and unique risks.
- The procedure for policy applications will vary widely depending on the market and risk. Some applications have only a few questions, while others may have 100 and require consultation with a third party risk assessment company. in cyber
At the end of the day, insurers want their customers to be proactive when it comes to cyber security. It requires more than technology. It means being aware of the risks and how to deal with them. And insurance should be an integral part of your cybersecurity plan, but never your only safety net. Using strict defensive measures and practicing good cyber hygiene is an important first step.
Need more information on protecting your business from today's cyber threats?
Contact risk management staff at BNC Agency