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If the Ashley Madison cyber-attack and subsequent data leak has left a bad taste in your mouth, you are not the only one.
Many people wonder how protected their information really is on so-called “confidential” websites. It turns out that websites that boast that they are as secure as can be – such as Ashley Madison, are far from invulnerable from attack. We all know how that turned out, many leaks later.
Duncan Stewart, Director of Technology Research at Deloitte, had this to say about cyber-attacks: “The number of attacks are rising, the severity is rising, and when they come, they're more difficult to deal with."
The Insurance Institute released a report this year, stating that in 2013, 89 per cent of Canadian businesses used the Internet, and 87 percent of households were connected to the Internet. Those numbers are amongst the highest in the world for connectivity.
That makes Canadians and Canadian businesses quite vulnerable to attack, because hacking software is freely available.
Indeed, this is a great security concern in Canada, particularly for businesses. A KPMG survey of Canadian insurance executives has reported that they see breaches in information technology security as the third-largest threat to Canadian companies.
Certainly, we need stronger laws and regulations to fend off cyber-attacks, but what can be done now?
This is where cyber-insurance comes in. Many people have never heard of this type of insurance, but it is on the rise, due to high-profile hacking cases like the Ashley Madison one.
Cyber-insurance started in the late 1970’s and at first, only information and communications technology coverage was offered as modern computers were just beginning to take shape. This expanded to include cyber security insurance and then expanded from one insurer to several.
Despite Y2K and Sept. 11, and the growing fears of cyber-attacks as the popularity of the Internet rapidly multiplied, cyber-insurance still wasn’t much in demand. Instead the corporate world looked at ways to lessen their financial losses in case of hacking incidents.
However, in the last few years, due to increasingly occurring high-profile attacks on Internet data and confidential information, companies have turned to cyber-insurance to protect themselves.
In fact, a Partner Re survey conducted in 2014, resulted in the findings that the market for cyber-insurance grew five-fold between 2006 and 2013. The same survey reported that it’s expected that demand for cyber-insurance is going to dramatically increase within a few years.
One can definitely see that this type of insurance may see an explosion in demand, given how disastrous the data leak for Ashley Madison was. Right now the company is facing multiple lawsuits, including class action lawsuits.
In a world where technology, and hackers, are constantly evolving, experts are warning that hacks are going to increase in severity and occurrence in the next five to ten years.
Cyber-insurance is not just for companies though. Individuals can purchase it, too, to protect themselves from liability against personal data leaks and identity theft. It is more and more likely that consumers will start purchasing this type of insurance, as it can cover things like monetary losses and expenses arising from lawsuits.
One thing is clear: Ashley Madison would have greatly benefited from having cyber-insurance. As they say, hindsight is 20/20.