Cyber threat insurance for small businesses
The many cyber security incidents that have victimized huge companies, including Citigroup, Google, Sony and others, get all the headlines.
But the reality is that smaller companies and government entities are in the direct line of as well. In fact, criminals these days are more prone to target these small entities, where they have enjoyed great success. Now, issuance of insurance against these threats has cropped up.
As of now, the cyber insurance market remains inchoate. Somewhat surprisingly, not a lot of companies, large or small, have invested in cyber insurance that would pay off after a breach. But that is starting to change. ZDnet noted recently that among the high profile insurers, ACE USA, Chubb, The Hartford and St. Paul Travelers Co. currently offer such insurance.
"But for most insurance companies it is still a niche line," it noted.
Advisen estimates that "there is only about $600 million in written premiums for cyberinsurance although other figures suggest the number is closer to $750 million."
My guess is that this segment of the market will ramp up quickly, as more companies come around to the view that it's only a matter of time before they are breached, despite their best efforts. Small businesses and entities need to think about this as well. While insurance policies tailored to this segment may be scarce now, that also is changing.
ZDnet notes that Farmers Insurance Group has developed a new line of Cyber Liability and Data Security coverage that is targeted at "main street businesses," which it seems to be rolling out in California and Texas.
"The coverage will be provided automatically for certain policies with a modified premium of less than $50,000 - effective Jan. 1, 2013. The new measures cover privacy breach response services, including customer notification, computer forensics and legal assistance. Policy holders also receive security risk-management services through FarmersCyber.com."
- here's the article