Why buy Cyber Liability Insurance?

Stew Nelson
Senior Risk Advisor

I am amazed that according to Experian, as of August 2013 that almost 70% of business owners have yet to purchase data breach (cyber liability) insurance! There are so many reasons to buy – and, I cannot think a single reason not to purchase this almost mandatory insurance. What is keeping businesses from buying this important insurance? Certainly, it is not because they feel it is not necessary. This same Experian study points out that business owners consider cyber threats to be as big a threat as other business risks. In fact, data from the Gartner Group bear this out as 40% of all businesses that experience a data breach are out of business in 6 months and 51% closed their doors within two years after a major data breach. So what is keeping you? It can’t be the price. The price of coverage has steadily dropped over the last two years as more carriers enter the market. I can provide coverage for an average business for around $1000 a year, besides if you can’t afford the price of the policy, how could you afford the cost of a major breach? I cannot figure it out, so I am asking you business owners and decision-makers to let me know your major purchase objections to buying this insurance?

Please post a comment with your reasons! I promise I won’t try to sell you a policy. I am just curious how there can be such a major disconnect between the need to purchase and the number of companies that have actually purchased it. Of course if you want a policy I would be happy to help with that also. These policies are not one-size-fits-all and you would be well served to buy from someone that has some expertise in selling these policies.