A data breach may not only damage your computer system or IT infrastructure, but it may also destroy your brand reputation. The consequences of a data breach may be very horrific, which may lead organisations, whether they be large companies or small businesses, to bankruptcy.

As desirable targets for cybercriminals, insurance companies must comply with strict data protection requirements. Non-compliance often leads to data breaches and considerable fines. In this article, you’ll learn about eight data protection best practices for insurance organizations to comply with relevant laws, regulations, and standards and safeguard your customers’ sensitive data.

The expanding attack surface of an increasingly interconnected digital world comes with a high degree of risk due to ransomware, phishing attempts, supply chain attacks, data breaches, and other cyber incidents. And while many organizations recognize the need for cyber insurance, a recent Forrester Research report found that only 55% of organizations in North America have purchased cyber insurance. 1

The rapid escalation of cyberattacks around the world has increased the number of prerequisites to qualify for a cyber insurance policy. If a business faces a cyberattack involving a data breach, it may find it hard to recover without additional support or resources. And this is just one example.

According to a 2022 Verizon report, 43 percent of all data breaches reported worldwide targeted small and medium-sized businesses – with numerous businesses reporting at least eight hours of downtime after a severe cybersecurity incident. Little surprise, then, that demand for cyber liability insurance has surged in recent years. Businesses – especially small ones, with fewer financial resources – want to be made whole after a disruption.

As cyber insurers become more experienced in what kinds of claims are being presented, and the threat action details therein, specific types of coverages are no longer being included. I’ve written quite a few times about specific cyber insurance claim cases that required going to court to settle. And in most of them, the courts sided with the insurer because the wording in the cyber insurance policy made certain it was covering specific use cases.

As more and more businesses and individuals rely on technology and the Internet, cyber threats such as data breaches, malware attacks, and cyber extortion are becoming increasingly common. Overall, cyber insurance can help mitigate the financial, legal, and reputational risks associated with cyber incidents.

Companies around the world and across industries face greater cyber threats than ever before. Cybersecurity incidents are becoming ever more frequent, and the costs associated with those attacks have marched upward too. As the risks grow, companies have strengthened their capabilities, both in prevention and incident response. Still, no company can guarantee that it will never be hacked, so companies must have cyber insurance in place in case the worst happens.

In today’s world organizations rely on computer systems and data for pretty much everything, including mission-critical processes and interactions with customers. And given the relentless increase in cybersecurity threats, this means that organizations’ need to protect themselves and their customer data from such threats is paramount. The average cost of a single data breach in the United States is now $9.44 million.