Whether we like it or not, we are submerged in the technology era. As businesses increasingly depend on electronic data and computer networks to conduct their daily operations, growing pools of personal and financial information are being transferred and stored online. This can leave individuals exposed to privacy violations, and financial institutions and other businesses exposed to potentially enormous liability, when a data security breach occurs.
According to the Aite Group, 47 percent of Americans experienced financial identity theft in 2020. The group’s report, U.S. Identity Theft: The Stark Reality, found that losses from identity theft cases cost $502.5 billion in 2019 and increased 42 percent to $712.4 billion in 2020. The Cost of a Data Breach Report, a global study sponsored by IBM Security and conducted by the Ponemon Institute, revealed that the average data breach cost rose from $3.86 million in 2020 to $4.24 million in 2021. Ransomware attacks cost an average of $4.62 million, surpassing the average data breach cost. These threats can lead to the theft, damage or misuse of sensitive information or other vital technologies and can result in downtime and recovery costs that often include specialized repairs and legal fees.
Cyber insurance evolved as a product in the United States in the mid to late1990’s, as insurers had to expand coverage for a risk that is rapidly shifting in scope and nature. In 2020, 203 insurer groups reported writing cyber insurance at one or more of their subsidiaries, up from 197 in 2019, according to data sourced from S&P Global Market Intelligence. A cyber insurance policy allows you to spend less time worrying about cyber threats, and more on what matters most because it helps reduce the potentially devastating effects of a claim. It can cover costs related to IT forensics investigation, data restoration, legal liability and customer notification.
Who is exposed? Any business that stores or processes sensitive information like names, addresses, Social Security numbers, medical records or credit card information needs cyber insurance. Also, any third-party who handles your confidential data and information, such as an accountant or IT service, should have their own cyber insurance policy. Most clients will require you to present proof of coverage before hiring you.
Given the amount of small businesses that have chosen to use and store digital data, the need for this coverage has expanded to more than just the healthcare and banking industries. A few of the many businesses that should consider a cyber policy include:
- Hair salons / Barbers
- Marketing companies
- Real-estate agents
- Financial firms
Orlando Insurance Center understands businesses in the community. You can find our offices in Orlando, and our clients all around Florida. As an independent insurance agency in Orlando, we take pride in reviewing your options with multiple insurance companies and comparing protection and prices to find the best value for your business. We are proud members of the Orlando marketplace, and we’re committed to being an advocate for you and your business in times of need.
Talk to our local experienced agents at Orlando Insurance Center and let them know what your needs and priorities are. Give us a call today at (407) 680-1214— for an initial consultation and quotes from among 20 different insurance carriers who support us!
Mariana Zorrilla, CIC, CRIS, CPIA