Business Insurance Account Executive
Danny Pehar has spent his entire career — close to 20 years — working in cybersecurity, so it may come as a surprise to see a byline from someone in his position on an article titled "The Importance of Cyber Insurance." After all, if a business is equipped with state-of-the-industry security software and carefully drafted employee protocols, why would cyber insurance be necessary?
"In the cybersecurity world," he writes in his cyber-insurance article, published May 28 on Forbes.com, "we have a very true and perhaps overused saying: 'It's not a question of if but when.'"
That belief is spreading well beyond the cybersecurity world. As My New Markets reported earlier this year, an Allianz Global Corporate & Specialty (AGCS) survey of more than 2,400 global CEOs, risk managers, brokers and insurance experts in 22 industry sectors found cyber incidents tied with business interruption as the biggest risk facing businesses in 2019.
Why breaches are inevitable
There are two main reasons why cyber most experts regard breaches as inevitable:
- Most cyber criminals operate not as lone hackers but as members of highly sophisticated global organizations whose crimes net hundreds of trillions of dollars annually. In other words, they're very good at what they do.
- Rapid advances in automation and artificial intelligence notwithstanding, all businesses still have some degree of human involvement, and where humans evolved, mistakes are sure to occur.
Whether your business is large or small, the problem of cybercrime clearly is too big to ignore.
The three pillars of cyber-security for business, Pehar notes, are "prevention, detection and response." And that brings him to his main point regarding breaches:
"When it comes to your response strategy, a phenomenal tool to have in your solution kit bag is cyber insurance, as it is the only answer for financial recovery to a breach."
Growing awareness among all sizes of business
Although cyber insurance has been around for more than 20 years, its widespread adoption as essential coverage for businesses of all sizes is a fairly new development. Insurance Journal recently reported on a recent study by global insurance broker Marsh that found cyber insurance take-up rates have doubled, from 19 percent to 38 percent, since 2014.
"As risk awareness has grown, more organizations, particularly those focused on their business interruption risk, are turning to the cyber insurance market for protection," Tom Reagan, U.S. Cyber Practice Leader for Marsh, told Insurance Journal.
High-profile cyber attacks on large corporations including Equifax, Target, Anthem Blue Cross Blue Shield and others increased awareness in the middle of the decade, and awareness further heightened with the 2017 WannaCry and NotPetya malware attacks.
Subsequent indications by insurers that they will cover business interruption caused by network intrusion only if the business is covered under a cyber policy made the need for cyber insurance all the more apparent. In addition, according, to the Marsh analysis, competitive pricing of cyber coverage has contributed to businesses' willingness to purchase it.
What this means to your business
Because no business is immune to cybercrime, it stands to reason that every business should protect itself with cyber insurance. Competitive pricing among the broad array of carriers offering coverage further contributes to the value of a cyber policy.
If you have questions about what kind of coverage is necessary for your business – or if you still question whether cyber insurance is necessary – I'd be happy to speak with you.
About Andrew Armstrong and Sylvia Group
A fourth-generation partner in Sylvia Group, Andrew Armstrong analyzes employers' risks, exposures and goals to design customized programs of performance-based business insurance. Through an open discussion of their needs and budget, he works with clients to design coverage programs in a collaborative process that leaves them feeling better for the experience. As a Dartmouth native who has returned to the SouthCoast after going to school, working and living in Boston, Andrew is at home in both areas, as well as in the family business. Talk with him to learn what Sylvia Group can do to protect your business and provide security for you and your family.
Voted "Best Insurance Agency" in both years of the SouthCoast Media Best of the Best Awards program, Sylvia Group helps businesses and individuals protect their future by designing insurance, benefits and financial planning programs. We’re a locally owned agency known for our commitment to our clients and our community, as well for our industry expertise. Founded in New Bedford, MA, in 1950, headquartered in neighboring Dartmouth, and serving businesses and individuals throughout Massachusetts, Rhode Island and beyond, Sylvia Group is certified as a Woman Owned Business Enterprise with the Massachusetts Supplier Diversity Office and has the distinction of being the first six-time recipient of the Five Star designation awarded by the Massachusetts Association of Insurance Agents (MAIA) for all-around agency excellence.