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The underwriting agency Dual reached an agreement with Lloyd’s to underwrite insurance policies for data protection and cyber risks.
How many data protection and cyber risk policies are taken out?
These are not mass-market lines of business, but demand for this type of insurance is growing. Dual has been one of the pioneers in offering this kind of insurance solution to companies, including medium-sized and small businesses, as well as the large companies that were already buying this protection. In fact, the underwriting agency reported that in 2015 it wrote 1,340 policies for data protection and cyber risks.
Its insured portfolio for this type of policy includes a broad range of businesses, associations, organisations and small industrial companies, most of them with turnover below 5,000,000 euros per year.
Having underwriting capacity on behalf of Lloyd’s gives Dual greater flexibility to offer its brokerage network cover that can be adapted to the needs of each insured.
What is cyber insurance?
Companies are increasingly aware of their exposure to cyber risks, although Spanish businesses still have a long way to go. A cyberattack on an IT system can seriously damage a company and, in many cases, SMEs are the route used by online criminals to reach larger targets.
As Raul Rodriguez explained in an interview published in Aseguranza magazine:
“sometimes management focuses only on the business, does not get involved, is not aware of security or of the need to establish policies, and that creates a chain effect downwards.”
In the event of a cyberattack, SMEs are usually more exposed because they have fewer resources to invest in security.
Large companies are not always aware of the information handled by third parties. Sometimes suppliers, which are often SMEs, may act maliciously after a contract termination, although human error is also a common source of incidents.
Social media is also an important threat for businesses. A US airline recently suffered an attack on its online sales system that drastically reduced ticket prices. Within hours, the news had spread on social networks and millions of people tried to buy tickets.
A company’s exposure to these risks can be substantially reduced through insurance specifically designed for these situations. Online sales increase exposure, although businesses that do not sell online are not free from risk.
The premium for this type of insurance can vary by up to 50% from one company to another, depending on its security level. These policies are inexpensive when compared with the protection they provide.
More and more contracts, especially from the United States, include a question about whether the company has cyber risk insurance.
If you need information about cyber risk and data protection insurance, please contact us.[/vc_column_text][/vc_column][/vc_row]