Cyberinsurance Ignorance

Morgan O'Rourke


May 1, 2015


As reports of data breaches become commonplace, cyberinsurance products are quickly gaining popularity. But not all business segments are jumping on the insurance bandwagon.

According to a survey by Software Advice of small- and medium-sized businesses (SMBs) with 500 employees or less, it may be a question of awareness—only one-third of those surveyed knew that cyberinsurance even existed. Adoption of these products is even lower. Only 2% have cyber policies, even though 84% expressed some level of interest in purchasing one.

The problem is that, while cyberinsurance policies may be relatively expensive for an SMB, a single incident could very well put them out of business. Respondents indicated the most important factor they would need to consider before purchasing cyberinsurance would be their own liability for a breach. This was followed by understanding premium costs, the likelihood of a breach and the breadth of coverage.

Despite the risk, 19% said they would never purchase cyberinsurance unless they were required to do so.

Morgan O’Rourke is editor in chief of Risk Management and director of publications for the Risk & Insurance Management Society, Inc. (RIMS)