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Should your firm invest in cyber risk insurance?

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  • Shackelford, Scott J.

Abstract

Firms have increasingly been turning to cyber risk insurance in order to better manage cyber threats and any resulting legal liability from data breaches. But how useful is this tactic? Herein, I analyze the impact of cyber attacks on firms, some of the applicable U.S. law shaping private sector responses to data breaches, and the extent to which cyber risk insurance helps mitigate the cyber threat. Ultimately, I argue that firms must take a proactive stance toward managing cyber attacks—not only for their wellbeing, but also to enhance overall cybersecurity and help secure critical national infrastructure.

Suggested Citation

  • Shackelford, Scott J., 2012. "Should your firm invest in cyber risk insurance?," Business Horizons, Elsevier, vol. 55(4), pages 349-356.
    • Handle: RePEc:eee:bushor:v:55:y:2012:i:4:p:349-356
    DOI: 10.1016/j.bushor.2012.02.004
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    Citations

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    Cited by:

    1. Wade, Megan, 2021. "Digital hostages: Leveraging ransomware attacks in cyberspace," Business Horizons, Elsevier, vol. 64(6), pages 787-797.
    2. Mazaher Kianpour & Stewart J. Kowalski & Harald Øverby, 2021. "Systematically Understanding Cybersecurity Economics: A Survey," Sustainability, MDPI, vol. 13(24), pages 1-28, December.
    3. Hayes, Darren R. & Cappa, Francesco, 2018. "Open-source intelligence for risk assessment," Business Horizons, Elsevier, vol. 61(5), pages 689-697.
    4. Guido Smidt & Wouter Botzen, 2018. "Perceptions of Corporate Cyber Risks and Insurance Decision-Making," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 43(2), pages 239-274, April.
    5. Dirk Wrede & Tino Stegen & Johann-Matthias Schulenburg, 2020. "Affirmative and silent cyber coverage in traditional insurance policies: Qualitative content analysis of selected insurance products from the German insurance market," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 45(4), pages 657-689, October.
    6. Alexander A. Ganin & Phuoc Quach & Mahesh Panwar & Zachary A. Collier & Jeffrey M. Keisler & Dayton Marchese & Igor Linkov, 2020. "Multicriteria Decision Framework for Cybersecurity Risk Assessment and Management," Risk Analysis, John Wiley & Sons, vol. 40(1), pages 183-199, January.
    7. Christian Biener & Martin Eling & Jan Hendrik Wirfs, 2015. "Insurability of Cyber Risk: An Empirical Analysis†," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 40(1), pages 131-158, January.
    8. Monica C. LaBarge & Kristen L. Walker & Courtney Nations Azzari & Maureen Bourassa & Jesse Catlin & Stacey Finkelstein & Alexei Gloukhovtsev & James Leonhardt & Kelly Martin & Maria Rejowicz‐Quaid & M, 2022. "Digital exchange compromises: Teetering priorities of consumers and organizations at the iron triangle," Journal of Consumer Affairs, Wiley Blackwell, vol. 56(3), pages 1220-1243, September.
    9. Shackelford, Scott J., 2016. "Business and cyber peace: We need you!," Business Horizons, Elsevier, vol. 59(5), pages 539-548.
    10. Md. Hamid Uddin & Md. Hakim Ali & Mohammad Kabir Hassan, 2020. "Cybersecurity hazards and financial system vulnerability: a synthesis of literature," Risk Management, Palgrave Macmillan, vol. 22(4), pages 239-309, December.
    11. Mendiela, Pauline, 2021. "Information security breaches and financial market reaction: the French case," MPRA Paper 105029, University Library of Munich, Germany.
    12. Tatar, Unal & Nussbaum, Brian & Gokce, Yasir & Keskin, Omer F., 2021. "Digital force majeure: The Mondelez case, insurance, and the (un)certainty of attribution in cyberattacks," Business Horizons, Elsevier, vol. 64(6), pages 775-785.
    13. Anum Khan & Muhammad Shujaat Mubarik & Navaz Naghavi, 2023. "What matters for financial inclusions? Evidence from emerging economy," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 28(1), pages 821-838, January.
    14. Eling, Martin & Wirfs, Jan Hendrik, 2016. "Cyber Risk: Too Big to Insure? Risk Transfer Options for a mercurial risk class," I.VW HSG Schriftenreihe, University of St.Gallen, Institute of Insurance Economics (I.VW-HSG), volume 59, number 59.

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