Cyber Insurance Price Hike Hits Local Governments Hard
Horry County, South Carolina, officials were in for a shock earlier this year, when they discovered their cyber insurance premium would be spiking from $70,000 last year to about $210,000.
And if they couldn’t satisfy the insurance company’s requirements and prove they had the robust controls needed to protect and defend themselves against cyberattacks, they learned, they wouldn’t be able to get their $5 million policy renewed at all.
“The insurance companies have you over a barrel. There was not a lot of negotiation,” said Tim Oliver, the county’s chief information officer.
Across the United States, many local governments and states — as well as private companies — are in the same boat. They’re discovering their cyber insurance premiums have skyrocketed and that they must meet stricter guidelines if they want to get coverage or renew their policies.
“Cyber insurance used to be very cheap,” said Alan Shark, executive director of the CompTIA Public Technology Institute, a Washington, D.C.-based nonprofit that provides consulting services to local governments. “But things have changed, and insurance companies are increasing rates dramatically and raising the bar and making it harder to get insurance. Some local governments may no longer be able to get it.”