We’ve written plenty about data breaches. Within the last year, valuable data has been stolen from Target, the University of Maryland at College Park, the California Department of Motor Vehicles, and the Internal Revenue Service. Retailers and reputations have suffered immensely from the negative publicity following thefts, and the frequency of breaches is increasing. But in the midst of this cyber vulnerability, one industry is about to take off.
Do you have good cyber insurance? An explosion in perceived cyber threats will lead to an explosion of attention to managing cyber risk, and that attention means booming business for cyber insurers. Randy Milanoff, a lawyer for insurance provider White & Williams, compares the Target data breach to ten Super Bowl advertisement for cyber insurers. If one of the largest retailers in the United States lacks sufficient cyber protection, we can confidently say the same about many other American corporations – not to mention small businesses, non-profits, schools, and hospitals.
Ann Arbor Public Schools currently pay more than $20,000 annually to protect its digital information for up to $1 million in costs – a perfect indication of the pervasiveness of cyber insecurity. Nearly all organizations rely on information technology; nearly all organizations need cyber protection. Coverage is expensive, but the costs of a data breach can prove far higher. The Target theft cost the company $441 million in their fourth quarter! In the age of digitalization, managing cyber risk will quickly become a mainstay of businesses small and large.