January 27, 2021 | Insurance Agent Engine

Cyber Liability Insurance is Now Critical Coverage

Cybercrime increased by 600% in 2020, according to the U.S. based IT security firm PurpleSec. COVID-19 changed businesses: the way they operate and the risks they face. And one of the most significant risks came not from the spread of the virus itself but opportunistic cybercriminals.

The U.S. is Now a Work-From-Home Economy

According to Stanford Economist Nicholas Bloom, 42% of the U.S. labor force is working from home full-time due to the COVID-19 pandemic. Almost twice as many employees are working from home as at a workplace.

The shift to a work-from-home labor force has had a positive impact on our health and the economy. According to Bloom, "Without this historic switch to working from home, the lockdown could never have lasted. The economy would have collapsed, forcing us to return to work, reigniting infection rates. Working from home is not only economically essential, it is also a critical weapon in our fight against COVID-19 -- and future pandemics."

But this shift in our work environment has also increased the cyber risks companies face.

Cyber Risks from a Remote Workforce

Transitioning employees to a mostly remote work environment has increased cyber risks, including:

  • lack of training and best practices of cybersecurity at home
  • use of unsecured WiFi networks
  • use of personal equipment

The FBI reports it's receiving 3,000-4,000 cybersecurity complaints every day, up from an average of 1,000 per day before COVID-19. An uptick in sophisticated phishing email schemes involving hackers posing as the Centers for Disease Control (CDC) or World Health Organization (WHO), tricking recipients into clicking links or opening attachments.

Cyber Liability Insurance is Now Critical Coverage

In previous years, the steady increase in cybercrime has meant cyber liability insurance was a good bet for businesses of every size. COVID-19 and its resulting wave of cybercrime have made this specialty coverage as important as general liability or commercial auto coverage.

Small Businesses Face Big Risks

Despite the news coverage given to hacks on big companies, such as the high-profile 2020 attacks on MGM Resorts, Marriott, Zoom, and Twitter, most cybercriminals are going after the little guys.

Small businesses account for 43% of cyber attacks -- the percentage increases when it comes to malware-specific attacks, which affect 58% of small businesses.

The average cost of a malware attack on a company is $2.4M, a price point that could put many small companies out of business permanently. Cyber liability insurance is designed to protect your company against the high-cost of a cyber attack.

There's no telling when, or even if, the majority of the U.S. workforce will return to the workplace or if remote work is here to stay. But one thing is for certain, hackers and cybercriminals will continue to exploit a remote workforce's risks.

Talk to your agent or broker to get a quote on your company's cyber liability insurance and protect yourself against the risks of cyberattacks and hacks.