Research has shown that the majority of companies do not have adequate insurance in place to cover data security breaches.
However, the market for cyber insurance is expected to reach around $7.5 billion by 2020. The research shows that only 41% of businesses have complete insurance in place for data breaches and loss, and only a third of companies have a dedicated cybersecurity policy.
The research was carried out by NTT Com Security, and participants included business decision makers from the US, UK, Sweden, Germany, France, Switzerland, and Norway. In the UK alone, more than 200 different businesses took part. In 2015, the premiums for cybersecurity policies were worth around $2.5 billion, but this is expected to treble by the end of the decade.
The report shows that around 12% of companies have no insurance in place for any breach of security, but the majority of business decision makers have admitted that there is an increased threat from hackers. Many believe that the cost of recovering from such a breach could start at around $1 billion.
Insurance for cyberattacks can cover the breach, network security liability, and extortion liability, but only 35% of companies believe that they currently need a policy. However, a further 43% are considering putting a policy in place.
The research shows that US companies are most likely to have this insurance, with 51% of businesses already having it in place. In the UK, this figure is just 26%. Security experts are calling upon companies to be better prepared so that the right insurance for their requirements can be put into place.