Many insureds feel they don’t need specialist cyber cover suggests survey

The survey conducted by Hanover Research found that 40% of insurance professionals from the cyber market believe organisations don’t buy specialist cover because they feel they don’t need it.

29% of respondents say clients don’t purchase the cover because they believe they are already covered for cyber risk under existing policies. Only 10% cite insufficient coverage and 12% overly costly premiums.

“Even though data breaches are in the news every week, many companies still don’t recognise that cyber attacks are serious, and that the costs associated with responding to one can be significant and generally not covered under current commercial insurance policies,” said Shawn Dougherty, Assistant Vice President of Specialty Commercial Lines at ISO, the survey’s sponsors.

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“That’s why insurers and brokers are working hard to educate businesses and make it easy for them to add cyber coverage to their existing insurance portfolio,” he added.

Of course it remains to be seen whether clients will eventually see the need for cyber cover or, as some suggest, the risk is being overhyped.

The survey also revealed that 51% of respondent organisations do not have dedicated cyber insurance underwriters and rely on staff from other lines to sell cyber policies.

It also reveals that optional endorsements to existing covers remain an extremely popular way to cover cyber risks. 92% of insurers surveyed offer optional cyber endorsements to existing insurance policies.

According to the survey, cyber extortion coverage is harder to come by. Only 18% of insurers questioned offer coverage for cyber extortion, while 79% offer coverage for data breach expenses.

More than 70% say credit card payment processors, financial service firms and national retail chains are the most hazardous to insure, while only 14% say hospitals and healthcare systems are the most hazardous.