Data Privacy & Cybersecurity » Coverage From Cyber-Insurance Could Prove Thin

Coverage From Cyber-Insurance Could Prove Thin

June 9, 2014

Cyber insurance demand is skyrocketing, but the difficulty of defining and quantifying damages means that companies suffering a breach will almost certainly find it extremely costly even with coverage. Cyber insurance demand leapt by 21 percent last year from 2012, according to risk management company and insurance broker Marsh, and with major cyber attacks in recent months, from Target to eBay, that momentum is unlikely to slow. But data the insurance industry has to work with is ambiguous and incomplete, as many cyber attacks go unreported or unnoticed, and hackers become more sophisticated over time. The most coverage a company is likely to get is around $300 million, but that wouldn’t cover a worst-case scenario like the one at Target, which may cost that company upwards of $1 billion.

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