It is expensive for businesses to deal with the aftermath of a data breach, especially if this cyber attack included a leak of customer’s personal information. Several big businesses and organizations have been attacked by hackers recently. This has caused an increase in the desire to purchase an insurance policy designed for dealing with cyber attacks. How will this effect you?
The recent hacker attack on Sony might be one that directly affected your family. Do your children, or your spouse, play video games on a Sony PlayStation? The PlayStation Network was hacked recently, and this resulted in problems for consumers.
Sony shut down the network for a while, which meant that gamers could no longer access their connection to other people through the PlayStation Network. Those who enjoyed playing video games against friends and strangers through the PlayStation Network no longer could do so.
More importantly, the cyber attack caused a data breach. This meant that the personal information that customers gave to Sony could, potentially, have been used by criminals for nefarious reasons. There is a possibility that users of the PlayStation Network could be victims of identity theft, as a result.
The damage control that comes from a cyber attack ends up costing businesses a lot of money. According to a study done by the Ponemon Institute, a data breach can cost a business around $7.2 million dollars, on average.
Someone has to write the letter of apology to customers, and that person needs to be paid for the hours spent working on it. Businesses often pay for affected customers to have a credit monitoring service, or identity theft service, just in case they end up needing it as a result of a data leak. Businesses also have to take the time to sort out and repair the computers that were hacked.
As a result, there are more businesses seeking cyber-insurance than ever before. This is a new type of insurance that businesses are just starting to realize they need. Aon Corp. offers cyber-insurance, and Travelers Insurance recently created their own version of this type of insurance policy.
This type of insurance is so new that an industry standard for what it should cover has yet to be created. In general, a cyber-insurance policy could cover the costs of repairing the damage made by hackers, as well as the cost of potential lawsuits from affected customers.
What does this mean for families and individual consumers? Not as much as you might think. Overall, when companies seek cyber-insurance, the primary concern is to find protection for themselves. The safety of consumers, and their sensitive information, is secondary. Right now, there are some businesses that choose not to disclose that they have been hit by hackers, which means that their customers will never know that they are potentially in danger of identity theft. At this time, there are no cyber-insurance policies designed for individuals.
Image by Uwe Hermann on Flickr