Cyber Insurance Now a Must-Have for South Carolina Businesses

Feb 7, 2019

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Credit iAmMrRob via Pixabay

As hackers become more sophisticated at burrowing into business computers to steal everything from money to social security numbers and medical records, the need for protection grows ever more dire.  One way to help mitigate the damage, if not protect information from being stolen, was virtually unknown a decade ago.  But in the past five years or so, cyber insurance has become a must-have bulwark against hackers.

According to insurance executive Adam Phelps, one in three businesses will be hit by some sort of cyber crime in the next year, and perhaps half of those will be small businesses. University of South Carolina business professor Robert Hartwig said insurance companies are more concerned about cyber crime these days than about natural disasters, because unlike fires and floods, large hacks aren't confined to a single regions.  If they happen to a large business such as Lowe's or Macy's, the damage could be not just national, where the stores may have branches in every state, but since they're also online, the crime could reach worldwide proportions.

In addition, the risk of cyber crime is always changing, as criminals adjust their tactics to thwart the latest protective software, said Hartwig.  He added the bad news that the chance of businesses avoiding a cyber attack is not good.  He said that over time, "as a business, your chance of being hacked is essentially 100 percent." 

Yet shockingly, said Phelps, most businesses still don't have cyber insurance, though more are adding it all the time.  Both men agreed, however, that while there is no foolproof defense against cyber crime, insurance can at least lessen the damage for most affected businesses.