A major cyber attack could cost the world economy $121.4 billion and businesses need to protect themselves by having sufficient cyber insurance.
This is according to a report recently released by Lloyd's of London and Cyence, titled Emerging Risks Report 2017.
The report states the economic and insurance consequences of cyber crime are increasing, with the average cost of such an attack fluctuating depending on the size of the event.
"In 2016, cyber attacks were estimated to cost businesses as much as $450 billion globally. Increasingly, insurers are helping policyholders manage these events; everything from individual breaches caused by malicious insiders and hackers, to wider losses such as breaches of retail point-of-sale devices, ransomware attacks such as BitLocker, WannaCry and distributed denial-of-service attacks such as Mirai," stated the report.
The report notes insurers are gradually starting to understand cyber liability and risk aggregation and creating products that are suitable for businesses.
Pete Banham, cyber resilience expert at Mimecast, adds cyber insurance cover is a relatively new but growing type of insurance and definitely has a role to play in business.
""It's crucial, however, that organisations understand exactly what their policies protect them from and what their terms require them to assume responsibility for. Evolving, sophisticated attacks and lack of employee training is leaving organisations at great risk of breaking policy terms. Cyber insurance can cover you for a wide range of claims that usually fall outside of more traditional commercial liability policies. This can include a level of protection against losses such as the destruction of data, extortion, theft, hacking and denial-of-service attacks. Additional related clean-up costs such as investigations, audits and public relations can also be covered."
Analysis from the report indicates the global cyber market will be worth between $3 billion and $3.5 billion by 2020.
"In SA, cyber insurance is an immature but high-growth market. Some policies have been around for many years but the increased importance of technology and rise in cyber crime has led to increased innovation, marketing and uptake of policies," explains Banham.
In June, an attack of a virus known as NotPetya spread from Ukraine to businesses around the globe. It encrypted data on infected machines, rendering them inoperable. NotPetya is reported to have caused $850 million in economic costs.
Share