SEC amps up cybersecurity, making insurance policy crucial for protection

May 26, 2024
1 min read


TLDR:

  • The SEC imposed a $10 million fine on The Intercontinental Exchange for a cyber breach
  • The SEC emphasized the importance of cyber insurance for all businesses

Two recent actions by the Securities and Exchange Commission have highlighted the crucial role of cybersecurity insurance in today’s business landscape. The SEC fined The Intercontinental Exchange $10 million for failing to report a cyber breach in a timely manner. This enforcement settlement underscores the increased regulatory scrutiny around cybersecurity. The SEC also released a statement by the director of the Division of Corporate Finance, Erik Gerding, emphasizing the need for public companies to assess the material impact of cyberattacks and report them accordingly.

Experts in the field, such as Tedrick Housh and Jillian Raines, stress the importance of cyber insurance in protecting businesses from regulatory violations and financial losses. Small businesses are especially vulnerable to cyberattacks, with a 22% increase in incidents since 2022. Keith Savino points out that cybersecurity is a universal need, and all entities should prioritize the protection of customer data through adequate insurance coverage.

When shopping for cyber insurance, companies should conduct thorough due diligence to ensure maximum coverage. Policies may vary in their coverage details, and it is essential to understand the extent of protection offered. Jillian Raines advises businesses to pay attention to policy exclusions, such as incidents caused by employee error, to avoid gaps in coverage. Monitoring cybersecurity litigation can also provide insights into emerging risks and liabilities in the industry.

In conclusion, the SEC’s recent actions underscore the critical importance of cybersecurity insurance for all businesses in today’s digital landscape. With the increasing threat of cyberattacks and regulatory scrutiny, investing in comprehensive cyber insurance coverage is essential to protect against financial losses and regulatory violations.


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