Monday, July 15, 2024

80 percent of companies don’t have sufficient cyber insurance

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According to a new report, 80 percent of insured companies that have suffered a data breach didn’t have sufficient coverage for the incident.

The study, from cybersecurity optimization platform CYE, finds the average coverage gap is 350 percent, which means that more than 75 percent of the incident was not covered.

In some cases, the maximum insurance gap is as high as 3,000 percent. Low tech sectors including accommodation and food services, construction, transportation and warehousing are among the more adequately covered ones, while sectors like finance and insurance, information and manufacturing present well beyond a 100 percent gap in coverage.

“Many organizations are aware of cyber risk, but do not fully comprehend what the potential cost could be if they are breached,” says Nimrod Partush, vice president of data science at CYE. “This study underscores how many companies rely on cyber insurance to cover the losses incurred as a result of cyber incidents and are then taken by surprise when they find that their insurance only covers a small portion.”

The insurance gap trend hasn’t seen a decline in recent years. This suggests a gap in organizations’ ability to accurately quantify their risks, and a gap in the ability or willingness of cyber insurers to provide adequate insurance coverage.

The report concludes:

This study, grounded in CYE’s extensive dataset, highlights the need for accurate cyber risk management practices. As the digital threat landscape continues to evolve, so must strategies for mitigating financial risks. Accurate risk assessment and optimized mitigation emerge as indispensable tools in the arsenal against cyber threats, helping businesses navigate the digital age with confidence and security.

The journey towards comprehensive cyber risk coverage is complex, but with diligent analysis, strategic planning, and ongoing adaptation, businesses can safeguard their assets against the ever-growing tide of digital threats.

The full report is available from the CYE site.

Image Credit: FuzzBones/Shutterstock

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