Data Privacy – More Cyber Insurers are Worried Than Ever Before

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Ransomware attacks may still be a huge online threat to businesses, but some cyber insurers are becoming increasingly concerned about the consequences of privacy violations.

If you follow that link you will find a report called, “Looking Ahead, Cyber Insurance Trends For 2024.” It has a survey of cyber insurance underwriters conducted by insurance company Woodruff Sawyer.

What is The Most Concerning Cyber Threat?

One question they asked them was, “What is the most concerning threat facing companies?” The survey revealed that the majority, 63%, were most concerned about the threat from ransomware, but a significant minority, 31%, placed the threat from privacy violations at the top of their list of concerns.

The reason that’s interesting is because in 2023, 53% of them had put ransomware as their top concern, but only 12% said that privacy violations were their number one worry. So, the proportion most concerned about ransomware attacks increased by 10%, while the figure for those most concerned about privacy violations rose by a greater amount: 19%. So why are more underwriters worried than before?

GDPR, CCPA, And More

GDPR came into effect in 2018, the California Privacy Act came along in 2020, and now 13 states have privacy laws on the books with Texas soon to follow. The Texas Data Privacy and Security Act (TDPSA) comes into effect on July 1, 2024, and becomes yet another set of complex rules that organizations collecting user data must negotiate.

Where breaches of any of these regulations occur, it’s a certainty that lawyers will be circling. The Woodruff Sawyer report notes that, “…Pixel tracking claims are the latest target for the plaintiff’s bar – going after companies tracking website activity through pixels on screen without proper consent.”

There’s a suggestion that it can take anything from five to six years for major privacy cases to run their course, and 2018 was the year that most countries and a smattering of US states began putting data protection legislation in place. So, it may be fair to assume that legal cases relating to those first post-legislation data breaches will be coming to an end, and that the full financial consequences will soon become clear.

Cyber Insurance Points Out Privacy

With that in mind, it looks as if cyber insurance underwriters are expecting that lawyers will be descending upon a rolling wave of cases. Where companies have been caught sharing large amounts of their customers’ data via pixels and other tracking technologies without first obtaining their express permission, they can expect not just regulatory penalties, but class-action lawsuits too. In case that sounds like speculation, it’s worth remembering that these have been on the rise recently, from 25 in 2020 to 36 in 2021, and then 43 in 2022.  

Organizations of every size now face considerable regulatory challenges. The sheer volume of customer data that they need to deal with while maintaining compliance with numerous industry-specific, state, federal, and international data protection regulations is truly daunting. But whilst cyber insurance is a must, organizations should also be investing in avoiding the need to claim it at all.

 Reflectiz Can Help

Reflectiz is an innovative security platform that helps organizations of all sizes to avoid the nightmare of regulatory penalties and legal action. It maps and monitors the digital assets in your web environment, finds what PII and sensitive data they can access, and tells you where that information is being sent. It ensures that tracking pixels are not collecting your customer data without the correct permissions, and it helps to keep your privacy and cookie policies up to date, minimizing the risk of privacy violations and fines. Protect your customers’ data and steer a safe course through the minefield of lawyers and legislation. Sign up with Reflectiz today.

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