A massive number of hacking incidents in the United States over the past years have caused insurance companies to boost their premiums limiting damage to cover $100 million at maximum. This is giving companies a very difficult time to operate in the modern digital age, and ultimately added expenses they will have their customers to shoulder.
Just as companies try to protect their intellectual merchandises, they must insure against problems with customer and corporate documents. But as hacking incidents intensifies, that is very difficult to obtain and pay for.
Hacking insurances are costly. Companies pay for investigations, credit monitoring, lawsuit fees and disbursements. Covering inadequate harm and raising effective premiums means that companies could be accountable to pay out of their pockets if found vulnerable to hacking and a lot of money is involved. Companies without this kind of insurance could easily lose millions of dollars that they will have to pay out for.
The recent attack on Target charged the company $264 million, but the company anticipates to regain only $90 million from its insurance. Similarly, a cyberattack on Home Depot forced it to shed $234 million in corporate payouts, but its insurance will only cover them for about $100 million.
High-profile hack attacks such as those information stolen from Target, Sony, and Home Depot have forced insurance companies to evaluate other certain companies as simply too much to cover everything. That is also a fact for retail and health companies, which have delicate customer information. Some insurers confirmed that they had turned down their clients in search of hack attack insurances.
Much like a good home security system, it gives their clients a break on their home insurance expenses. However, the expenses for a computer hack attack insurance solely depends in part on the companies' own security procedures.
In this regard, the Health sector suffers most from insurance climbs, more often seeing insurance premiums triple in value. Premera Blue Cross and Anthem are only two of the many US Health insurers affected by the enormous hacking incidents at the beginning of 2015 alone.