Cyber attacks on the rise — but companies still unprepared to tackle major threat

Cyber risks are the top concern among businesses of all sizes, but nearly half of them still don't have proper insurance coverage or risk management measures in place to address possible exposures, reveals a new survey by property/casualty insurer Travelers.

Overall, 55 percent of the respondents cited cyber attack and ransomware as their biggest worries, ahead of medical cost inflation (54 percent), employee benefit costs (53 percent), the ability to attract and retain talent (46 percent) and legal liability (44 percent).

Travelers noted that while there is greater awareness of cyber risks generally, one in four survey participants didn’t believe their business would suffer a cyber attack, and thus opted not to purchase a cyber insurance policy. The top reason for not purchasing a cyber insurance policy (cited by 31 percent of respondents) was the "expense".

According to the latest risk index, extortion or a ransomware attack was cited as the third highest cyber-specific concern, which increased to 52 percent from 44 percent in 2018.

“The Travelers Risk Index shows that more businesses are taking steps to prevent a cyber event, but it’s still alarming that nearly half don’t have the proper insurance coverage,” said Tim Francis, enterprise cyber lead at Travelers.

“One cyber attack can put a company out of business. Taking the threat seriously and implementing a risk management program that addresses possible exposures can help a company not only avoid an attack but also recover from one as quickly as possible.”

According to the report, since 2015 the percentage of small business respondents who have suffered a cyber attack has tripled, from 4 to 12 percent this year. Increases are also being reported among medium-sized companies (10 percent in 2015 to 20 percent this year) and large businesses (from 19 percent to 33 percent).

“More companies are experiencing cyber attacks,” Francis added. “The cost of a single breach to a small business can easily reach a substantial amount of money on top of the time it takes to restore the business, so protecting a company’s assets with a cyber insurance policy is critical.”

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