Despite a growing awareness of the risks, six in 10 companies lack cyber liability insurance, according to an annual survey by Towers Watson.
The increasing number of cyber attacks, along with breaches in security and privacy, are forcing corporate risk managers to reconsider how they protect their companyÃ¢â‚¬â„¢s data and proprietary business information.
Towers WatsonÃ¢â‚¬â„¢s Risk and Finance Manager Survey found that the average policy limits purchased for network security/privacy liability policies were $18.1 million Ã¢â‚¬“ a significant 46 percent increase year over year.
In addition, nearly two-fifths (39 percent) of respondents purchased network security/privacy liability policies, up 11 percentage points from last year.
When asked why they had not purchased a policy, some 31 percent (a 10 percentage point decrease from last year) said their internal IT department/controls were adequate.
Towers Watson warned that the financial and reputational costs companies face could be enormous if they donÃ¢â‚¬â„¢t develop comprehensive risk strategies to thwart cyber attacks.
Towers Watson’s findings are in lineÃ‚ with a new report from the Insurance Information Institute (I.I.I.) that notes that despite broad awareness that cyber risks and cyber security are a serious threat, a majority of companies today still do not purchase cyber risk insurance.
However, this is changing, according to the I.I.I. Recent industry analysis suggests that more companies are now purchasing cyber coverage and that insurance has a key role to play as companies and individuals look to better manage and reduce their potential financial losses from cyber risks in future.