The Rising Cost of Containing a Data Breach in the US

Topics: Agent Resources Cyber Liability

In June 2017, IBM Security and Ponemon Institute released the 2017 Cost of Data Breach Study: Global Overview. The study provides a snapshot of the cost of a data breach across the globe, using data from 419 companies in 11 countries and two regions, which includes the United States, Canada, and the United Kingdom.

2017 Ponemon Cost of Data Breach Study

A data breach could cost your clients millions. AmTrust Cyber Liability can mitigate the cost.Informative in many ways, the study provides suggestions for companies looking to prevent and mitigate the costs of a data breach. One piece of advice for companies, among the many recommendations provided, is to purchase data breach insurance.

According to the study, coverage “can help manage the financial consequences of the incident.” The report further goes on to say that according to the data, using insurance protection, in conjunction with business continuity management strategies, helps companies mitigate the costs of a data breach after it’s discovered.

As an agent, you likely already know the importance of cyber liability insurance, but many of your clients aren’t going to be convinced easily. That’s why it’s important to use the terms they’re most familiar with: dollars and cents.

Here are a few key takeaways from the study:

  • The average total cost of a data breach in 2017 is $3.62 million, which is down 10% from 2016
  • The average size of data breaches increased 1.8% from 2016 to 2017
  • The average cost of data breaches decreased from $17 to $8 from 2016 to 2017, due mainly to currency rate fluctuation
  • Companies in the study have a 27.7% chance of a data breach within the next 24 months
  • 47% of organizations found the cause of the data breach to be a criminal or malicious attack

Using Facts & Figures to Sell Cyber Security Insurance

Selling to a client who believes they already have all of the information they need can be tricky. But as an agent, one of the best and most fulfilling ways for you to sell your product is to simply educate your clients. Using data from the 2017 Ponemon cost of data breach, agents can create client loyalty and trust by providing a solution to a growing problem for small and mid-size businesses.

Find the Need

The first thing you need to do is find out whether or not your client is at risk for a data breach. Unless your client doesn’t use internet-connected computers for their business, chances are they need cyber liability. Data breaches can happen even if your client is only using the computer for email.

Educate the Client

In 2017, your clients don’t want to feel like you’re selling to them. And most agents don’t want to feel like they have to sell their product. In many cases, your clients already fear a data breach or at least understand the risk. 

Educate & inform clients to gain their trust and respect. Then offer an AmTrust product solution.

Help them see how the risk of a data breach might affect their company using data from the 2017 cost of data breach study. Then using AmTrust Online, AmTrust appointed agents can show clients the huge cost savings of a Cyber Liability policy for their next data breach.

Close the Sale

If your client still isn’t convinced, or didn’t have time to read the study and the key points, agents could try a more direct tactic of using the client’s own data breach costs along with data from the study. Pointing out that the 419 companies included in the study have a 27.7% of a recurring material data breach within the next 24 months may be a great fact to point out. 

Educate to Grow Your Business

Working with clients from small and medium-sized organizations can present special challenges. Oftentimes, you’re working directly with the decision-maker. Whether that means working with a client solely focused on the financials, or that means working with a client with looser purse-strings focused on security, using data to educate can be a winning strategy across the board.

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