Cyber As Standalone Insurance
Today’s business models often operate using technology and the Internet to execute workflows efficiently. With the increasing use and implementation of the Internet at work, cyber threats have escalated in the past years. There’s no doubt that online information is always at risk from phishing, hacking, or the like. The best thing you can do is take the steps to protect sensitive and private information from getting into the hands of others. You don’t want your car or home damaged without being taken care of, or even your health from taking a backseat, right? So, you purchase insurance for those things to protect them if something were to happen. You can sleep better at night knowing you’re protected. Wouldn’t it be nice to feel that way about your cyber security?
So, what is Cyber Insurance?
A cyber insurance policy is designed to help an organization reduce risk exposure by offsetting costs involved with recovery after a cyber-related security incident. Cyber insurance typically covers expenses related to first parties as well as claims by third parties. There is no standard for underwriting these policies, but the following are common reimbursable expenses:
Check it out: Cyber and Data Insurance Explained in 2 Minutes (Video)
A forensics investigation is necessary to figure out what really happened and how to repair any damages.
A cyber insurance policy can include similar items that are covered by an errors policy as well as monetary issues like network downtime, business interruption, data loss recovery and the mounting costs related to managing a crisis.
Privacy and Notification
Includes required data breach notifications to customers and other affected parties.
Lawsuits and Extortion
Includes legal expenses associated with the release of confidential information and intellectual property. They may also include costs of cyber extortion, such as ransomware.
What are the steps to reduce cyber liability risk?
- Maintain and update security software regularly
- Working with and IT security vendor
- Using cloud storage
- Regularly backup data at a secure offsite location
Check it out: Cyber Insurance Checklist
What should you look for as a buyer?
Like buying any other insurance, it’s important to ask the right questions to ensure you’re getting the coverage you need. Cyber insurance is a relatively new concept, so there is a lot of uncertainty about how to go about purchasing and what you need to look for. Here are a few questions to help guide you towards the right policy for you.
- Does the insurance company offer one or more types of cyber insurance policy, or is the coverage an extension of an already existing policy?
- What are the deductibles?
- How does the coverage and limits apply to both first and third parties?
- Does the policy cover non-malicious actions taken by an employee?
For more information on Cyberattacks, check out our Insurance Technology Pillar Page