Despite high-profile data breaches of companies such as Target, JPMorgan Chase, eBay and Community Health Systems, 40% of cyber carriers say policyholders think they don't need cyber coverage and 29% think they are covered under existing policies, according to a survey conducted by Hanover Research and sponsored by ISO.
"Even though data breaches are in the news every week, many companies still don't recognize that cyber attacks are serious, and that the costs associated with responding to one can be significant and generally not covered under current commercial insurance policies," said Shawn Dougherty, assistant vice president of Specialty Commercial Lines at ISO.
And it's difficult to convince businesses they need cyber coverage when staff resources are limited. Just more than half of the respondents say their companies have no staff dedicated solely to drafting cyber insurance policies. Nearly a third have a small staff of 1 to 5 people. Staff resources vary by size of carrier. More than two-thirds of medium-sized companies (those with premiums between $250 million and $1 billion) do not have dedicated cyber underwriters, but 57% of smaller carriers (less than $250 million in premium) have at least one employee, and nearly 30% of large companies (more than $1 billion in premium) have a substantial staff of 11 or more working to draft cyber policies.
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