Recently, the Cyber Liability Blog, Junto, Listed the top five reasons businesses don’t purchase cyber liability insurance. In case you are one of the many hold outs that haven’t purchased cyber insurance yet - here are my answers to the reasons you procrastinators try to present for failing to purchase. 
What are the top five reasons organizations don’t buy cyber insurance?
- Brokers generally aren’t good at communicating the value between different insurance policies and the forms are hard to compare so it leaves the insured less confident to buy the product.
If your broker cannot demonstrate to you that they understand cyber liability, specifically, your cyber liability, please find one that can. If you have an uninsured cyber claim - are you going to tell your boss or your stakeholders that cyber insurance is just too complicated and you could not be bothered to do the research to find a qualified broker? Cyber liability policies are stand-alone products in the sense that you don’t need to have other policies with that carrier to buy the cyber piece and you certainly don’t need to use your current broker.
- In many cases, the insured believes cyber insurance is already part of their policy, when in fact it’s not.
We have been over this point many times already! Don’t look to your current policies to provide any cyber liability coverage. It is not going to be there. There may be some small amounts of cyber coverage in a crime policy but for the most part your General Liability, Directors and Officers and umbrella policies all exclude cyber liability.
- The organization is still resistant to the cost involved and believes it’s too expensive. They might read the headlines about data breaches but still have an “it won’t happen to us” denial.
I have sold Cyber Liability policies for $1,000 and the price seems to be coming down every day. Now you won’t pay that price if you are a multi-billion dollar company, but I have quoted those some of our largest clients with sales in the billions and the price was still less than $50,000.
Think it won’t happen to you? In 2010 according to Verizon’s latest report, 63% of all breaches were at small businesses, and according to Visa, 95% of its credit card breaches are against its small business customers. My calculations put your odds at 2 to 1 that you will have a breach. Compare that to the 1 in 4 odds that you will have a home fire. Yet, I bet you all have homeowners insurance.
- The organization might be resistant to the idea of notification costs as a sub-limited coverage. They might find it off-putting that they are told that they have to get a higher amount of liability coverage to obtain the breach notice limits that are really driving the purchase.
You don’t have to cover the entire liability. If you can’t afford the insurance then what are you going to do if you have a breach? I can guarantee you the breach will be much more expensive and embarrassing than the Cyber policy. Many policies have sub-limits.
- This one is hardly a blinding flash of insight, but the company just might not be paying attention. They might be short-staffed or they think it’s taken care of or they put off buying insurance until next year.
Not paying attention! Yikes! I suppose I can imagine someone that can honestly say they have never heard of a data breach or cyber insurance but certainly not the readers of my blog!
I want you all of you business owners and managers to make a New Year’s resolution to speak to a qualified agent about cyber insurance. If you don’t have a knowledgeable broker to speak to - please call me. I am happy to help you. Stewart Nelson 888-263-4656 ext 1140.
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