Cyber crime has become one of the primary concerns for businesses both big and small across the United States. The country’s latest spat with Iran only served to further cement the dangers of cyber crime amongst the general public. The problem is exacerbated by the rise in ransomware attacks, and as a result insurers are looking to drastically increase the premiums for cyber insurance policies.
Ransomware refers to a type of malicious software program that is designed to take control of multiple devices on one system. The software usually locks the devices until the victim pays a ransom.
Experts in the space have said that less ransomware attacks happened in 2019, but the problem is still pervasive. Furthermore, when an attack does happen it can easily rack up millions in damages. As a result, more insurers are wary of offering cyber insurance policies that include ransomware coverage.
According to Coveware, the average cyber attack ransom in 2019 was $41,198–not a small sum. In general, these ransoms are not proportional based on the target. Oftentimes businesses are given a ransom that they have no hope of actually paying. These businesses have been turning to cyber insurance policies to help, but soon they may not even be able to afford that.
According to the Insurance Journal, “U.S. insurers are ramping up cyber-insurance rates by as much as 25% and trying to curb exposure to vulnerable customers.
Some insurers are trying to keep the premium raises lower by altering their cyber insurance policies so that policyholders have to pay up to 30% of ransom claims. For many, this is a reasonable alternative, but if you choose to go this route it is essential that you have enough money stashed away to pay that portion should an attack occur.
Cybercrime is not going anywhere any time soon. The sophistication and costs associated with these crimes will continue to fluctuate until the rest of the world adapts. Until that time, drastic changes in cyber insurance policy costs will likely continue.
To learn more about your current cyber policy, or to inquire about obtaining an entirely new policy, we encourage you to reach out to TGS Insurance at www.tgsinsurance.com.