The data produced and stored by some companies can be as valuable as any tangible product is to others. This is an important fact to know when planning IT network security solutions. Effective network security provided by proficient IT network services is always the best insurance for protecting valuable data; however, companies should protect themselves and their data in another way. Data insurance provides essential brand and liability protection in the event of a data breach.
What Is Data Insurance?
Data insurance is a form of business liability coverage that falls under cybersecurity insurance, protecting businesses that experience network security breaches of any form. For any company that values its data as a critical asset, data insurance and the right IT network services is important coverage that should not be overlooked.
The Need for Data Insurance Is Growing
The cybersecurity industry continues to grow as more numerous and sophisticated IT network security threats are unleashed each year. Within the industry, the sector seeing the most growth of 30% each year is the cybersecurity insurance market. Data insurance falls within that sector.
Based on increased cybersecurity threats being detected each year and the damage companies are sustaining when falling victim, more companies are beginning to realize the need for data insurance to protect their digital assets. Industry experts estimate that by 2020, the cybersecurity insurance industry will reach $5.6 billion annually as more companies realize how damaging a breach of their network security can be. Although the number of businesses choosing to protect their digital assets with data insurance is increasing, so far only about 15% of all companies that need this have it.
Determining the Value of Data to Gauge Risk
While not every business needs data insurance, those in the financial and healthcare industries as well as many other data-driven industries certainly do. Companies in these industries can suffer significant losses including lost income, damage to their brand, and liability issues when IT network security breaches result in the damage to or theft of essential data and personal information.
The biggest questions facing the industry in coming years is the worth is of a company’s data and how can such value be calculated. With more businesses purchasing cybersecurity insurance policies to cover data loss, finding accurate means to do so is becoming an important focus.
Since every business uses its data in different ways, experts point out that data use, liability risk, financial risk, and the actual economic value of the data must be taken into consideration when valuing business data for insurance purposes. These and other financial and non-financial factors such as company uniqueness, the implementation of effective IT network services, and even performance expectations for data sold as a commodity can give businesses and insurers an idea of the extent of damage that can occur after a data loss.
Moving into the new year, the understanding of data as an asset and the significance of its loss due to insufficient network security is growing among those companies that are most at risk. As more businesses explore their risk and the idea of supplementing their IT network services with data insurance, better and more detailed methods of valuing such data are being developed. With the average cost of a data breach due to insufficient IT network security at nearly $3.6 million, data insurance is a growing trend that companies handling valuable business and personal data should closely examine!
