For businesses both large and small, cybersecurity threats continue to proliferate, to the point where being the victim of a cyberattack seems almost inevitable. According to a recent study, cybercrime cost the global economy $454 billion in 2016. As such, cyber insurance policies have become an increasingly popular method of mitigating the resulting losses, which can encompass both financial and reputational harm. For example, insurers have reported a “rapid rise” in cyber insurance policies following the June 2017 “Wannacry” ransomware attack. Even the government is getting involved, as on July 26 of this year, the House of Representatives convened a hearing titled “Protecting Small Business from Cyber Attacks: the Cybersecurity Insurance Option.”
The cyber insurance market is projected to grow from $1 billion in 2015 to over $7 billion in the next five to 10 years, depending on the source of the projection. According to a recent survey, 70 percent of businesses now offload the risk of a cyber-attack to a third-party insurance company. Given recent trends, this estimate is unsurprising. Insurers have taken note: In the early 2000s, fewer than a dozen offered cyber insurance coverage, whereas more than 70 do as of 2016.
