More companies are starting to purchase cyber liability insurance in the wake of a string of high-profile data breaches. But it's a relatively new type of insurance, and policies can vary from carrier to carrier, so it behooves companies to ask plenty of questions and make sure they understand what they're buying.
Certainly the breaches that occurred over the last 18 months were big enough to capture executives' attention. In late 2013, a breach at Target exposed the credit and debit card data of 40 million customers, as well as information such as addresses and emails for another 70 million. In 2014, companies hit by data breaches included Home Depot, which had 56 million card records compromised, and JPMorgan, where the names, addresses, and phone numbers of 76 million households and 8 million small businesses were exposed.
"There's no doubt that on the back of what happened in 2014, particularly in the retail sector, the sale of cyber insurance has really accelerated," said Ben Beeson, vice president for cyber security and privacy at brokerage Lockton Cos. The amount of premium spent on cyber coverage is estimated to total about $2 billion now, he said, almost double the level 18 months ago.
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