The Federal Trade Commission (FTC) and the National Association of Insurance Commissioners (NAIC) have issued guidance suggesting companies consider cyber insurance as a means of resilience against cyberattacks. While essential, merely suggesting cyber insurance isn’t enough. The government must ensure its availability and affordability, especially for small businesses. Businesses must also take other steps to prevent cyber-risks and keep policies affordable.
The digital age brings immense benefits, but with it comes increased cyber threats to businesses. The solution isn’t just insurance — it’s proactive cybersecurity.
Businesses should consider cyber insurance a risk management tool, but it’s not a comprehensive solution to all cybersecurity challenges. It also may be beyond some small businesses’ financial means, and the cost is increasing. According to NAIC, cyber-insurance premiums grew 61% in 2021 alone, when the average annual cost for cyber insurance for a business with $1 million in revenue to have $1 million in coverage (with a $10,000 deductible) was $1,485. The prices have since increased, and some businesses find insurers unwilling to renew policies or…
