The Internet presents a variety of risks for companies, including systems crashes, hacking attacks, security breaches, and the mishandling of private information.
While companies should do all they can as a matter of policy, practice and technology to prevent such risks from coming to fruition, there is no such thing as perfect prevention. Accordingly, as a backstop, companies would be prudent to procure appropriate insurance for their Cyber risks.
A variety of insurance products to address Cyber risks have entered the marketplace for the past decade. And, according to recent press reports, the demand for Cyber security insurance has surged in recent months in the wake of some noteworthy data breaches and an increase in privacy claims. And the reported good news is that the rates charged for some Internet-related insurance has come down recently. In the mix, certain coverage limits have been raised and some deductibles have been lowered.
Insurance policies still could evolve in this relatively new area as information technology grows and changes. Indeed, the recent social media explosion could result in new risks that may call for even newer insurance products.
Companies would be better off safe than sorry and they should seek insurance that matches up with the profile of their Cyber risks.