Even small businesses are now increasingly dependent upon internet-based activities. Accordingly, small businesses need cyber insurance coverage. According to research, many small and mid-sized businesses collapsed within very short period because of cyber attack. The problem is that small businesses are often overlooked in this market because of difficulty in pricing strategy.
Difficulties Related to Cyber Insurance
Cyber insurance coverage has not been widely available. Many problems are still associated with this new insurance market. They include the following:
- Lack of data. Many small insurers are unable to offer cyber insurance policies. The time and effort required to determine the cyber-related risks outweigh the premiums paid by the small and mid-sized businesses (SMBs).
- Unknown risks As there are no data and modeling for cyber risks, pricing for cyber insurance policy is uncertain. Even if the insurers offer the policy, the premiums may be too costly for the SMBs. This difficulty is actually admitted by insurance experts. Given unknown risks, the insurers depend much upon qualitative assessment for the claims.
- Lack of policies. Some states have not regulated cyber insurance. This may make it difficult for the SMBs to buy the policy, since the threats are subject to personal perception and the coverage offerings may too varied.
- Lack of interest on the part of SMBs. Some SMB owners see that they are not the target for cyber criminals. As a result, many SMBs choose to leave internet-based activities uninsured. Cyber criminals begin to identify small businesses that are interacting with larger systems. They are potential targets, since most growing businesses have weaker protection.
Actually, cyber insurance is must-have coverage for SMBs, if they do not want to be the victims of cyber crimes. Many aspects can be used as assessment tools. They include the size, type, scope of the business, type of cloud-based data managed by the company, number of customers, and presence on the web.