Chaney: Protect Your Business from cybersecurity Risk
By Mike Chaney
October is Cybersecurity Awareness Month, and the growing threat of cyberattacks demands attention from all businesses, regardless of size. As Mississippi Insurance Commissioner, I urge all companies to evaluate their risk and consider cyber insurance as a vital component of their overall risk management strategy.
Cybersecurity incidents can severely disrupt operations and lead to significant financial losses. Unlike traditional property and liability policies, standard coverage typically doesn’t extend to cyber risks, making specialized cyber insurance policies essential. These policies are tailored to the specific needs of each client, and both insurers and producers have a duty to safeguard the sensitive financial and health information they handle during underwriting and claims processing.
Certain sectors, especially healthcare and financial services, are experiencing a disproportionately high number of cybersecurity incidents and associated costs due to the valuable data they possess.
Mississippi has already taken steps to address these concerns. In 2019, the state legislature passed Senate Bill 2831, the Insurance Data Security Law. This law establishes data security standards for the insurance industry in Mississippi and outlines procedures for reporting and investigating security breaches. Licensees are required to notify my office within three business days of discovering a cybersecurity event involving non-public information.
The demand for cyber insurance is demonstrably increasing. A recent report from the National Association of Insurance Commissioners (Fall 2024) estimates the U.S. cyber insurance market at $9.84 billion in direct written premiums – representing 59% of the $16.66 billion global market in 2023.This growth is mirrored by a rise in claims, with over 33,000 filed in 2023, highlighting the escalating frequency of cyberattacks.
My office recognizes the complex and evolving nature of the cybersecurity landscape and is monitoring calls for enhanced legislation and regulation nationwide. Protecting businesses from risks like identity theft, business interruption, and data recovery costs is a priority.
Ultimately, purchasing cyber insurance is a proactive risk management decision. I encourage every business owner to assess their individual vulnerabilities and determine if cyber insurance is a worthwhile investment in their future security.
Mike Chaney is Mississippi Insurance Commissioner.
