Companies investing in cyber-risk insurance to protect against breaches

The solid embedding of mobile devices and laptops within businesses' and consumers' everyday lives has allowed them to bank, shop and communicate on-the-go. However, the ability to do perform these tasks has made them more vulnerable to identity theft.

In fact, the threat has become so serious that an increasing number of businesses are taking out "cyber-risk" coverage to insure their enterprises against the possibility of a data breach, the Wall Street Journal reported. Last year, the number of clients insurance broker Marsh had purchasing such policies jumped by one-third.

Generally, this form of coverage protects against measurable costs of a breach, including tools required to analyze a breach, alert customers of a compromise, offer credit monitoring to affected individuals and address any potential lawsuits, the news sourced explained.

"We annually evaluate our corporate risk profile and the insurance products available in the market to determine appropriate coverage for our business, including cyber risk," Galen Smith, chief financial officer of Outerwall, told the WSJ. "As part of that, we purchase cyber-risk insurance."

Firms are doing more than just taking out insurance to protect against breaches. According to research from Canalys, IT security spending is set to reach $30.1 billion in 2017.