When a company takes on operating expenses, there are some costs that practically all businesses share, and then there are expenses that are specific to an industry.
Most businesses probably need office supplies, telephone and internet service, and rent or a lease, while only some types of industry may need a fleet of vehicles or drilling equipment, for example.
There’s a new business expense that practically any industry may face: cybersecurity insurance. More and more companies are scrambling to find coverage against the astronomical expenses associated with data breaches, and the damage the comes from exposing sensitive information. This information might be customers’ personal and financial data, employee payroll records and identities, or even proprietary information specific to their industries.
According to information compiled by the Identity Theft Resource Center, this is an era of record-setting numbers of data breaches. Due to those breaches, the Center for Strategic and International Studies reports that cyberattacks cause $291 billion a year in losses. Even a single event such as the WannaCry ransomware attack last year can leave billions of dollars in damages in its wake.
These frightening statistics have spurred a number of businesses of every size and industry to seek out additional insurance coverage specifically to protect them from cybersecurity events. Some insurers have seen double the number of clients buying cybersecurity insurance, but across the industry, the estimate is closer to about 40 percent.
The result of such a mad dash in the insurance industry can mean that businesses aren’t getting exactly what they need, though. Companies may find themselves paying for coverage they don’t need, falling for one-size-fits-all solutions, or worse, learning after the worst happens that they aren’t adequately covered. It’s important to meet with your insurance provider and discuss these concerns, as well as making sure have the right security tools in place before an incident happens.