Any business renewing a cyber insurance policy over the past year learned that premiums went up. Way up. According to Marsh, the price of cover in the US grew by 130% in Q4 of 2021. In the UK it grew by 92%.
To make matters worse, in order to offset the growing risk, coverage and limits decreased. And by all accounts, prices will continue to rise as cyberattacks – mainly ransomware – continue to plague the corporate world.
Your coverage is changing
The current trend in Cyber insurance is creating a coverage deficit.
- Premiums are higher – in many cases they’ve doubled.
- Payouts are lower – and may not fully cover damages.
- Waiting periods are longer – the first 8-24 hours of downtime are often not covered for damages.
But you’re not only paying more for cyber protection. You’re getting less protection from non-cyber-related incidents – including business interruption clauses nestled in your cyber policy. Many businesses believe they are protected against cloud downtime by these clauses. But the waiting times, deductibles and proof of damages were never very protective. But now, terms have gotten even worse.
What’s the ROI on your coverage?
In the past, waiting periods for cloud outage under cyber policies were around 8-12 hours. But today, they are extended up to 24 hours. And as you’ll see – that provides very poor coverage.
In 2021 Amazon (AWS) Microsoft (Azure) and Google (GCP) suffered 18 major cloud outages. All caused financial damages to millions of companies across the globe.
- The average outage length was 3.5 hours.
- The longest event lasted 11 hours.
With a waiting period of 8 hours, a cyber policy would kick in for only two of the 18 major events. With a 12 hour waiting period or more, you’d get indemnified for none of the events.
Cyber insurance is mission critical. Businesses depend on it to protect themselves. Investors expect and demand any risk be mitigated. Companies don’t have the privilege of nixing cyber coverage. But policy price aside – if you’re relying on your cyber policy to protect your business against cloud outages – it simply won’t cut it.
Dependable coverage that reflects the risk
Cloud downtime insurance doesn’t replace your cyber policy. It complements it to cover more risk scenarios. To provide peripheral protection for your business from today’s tech perils.
Cyber attacks are impossible to predict and preempt. There’s an active arms race between cyber attackers and cyber protectors. But businesses don’t need to sacrifice the scope of their coverage.
Cyber volatility is making risk harder to manage, and companies are paying the price through more expensive policies. But when one of your risk variables changes, you can reshuffle things around to redefine your protection and to manage the new risk landscape.
Cloud downtime Insurance is one way companies can mitigate the risk of business interruptions, regardless of whether the cloud failure is the result of a cyber attack. It fills the coverage gap, and protects your business against the damages of digital catastrophes. And equally important – it complements the diminishing BI coverage your cyber policy provided in the past.