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What is Cyber Insurance?

We live in a digital world and most businesses, even those traditionally considered “offline”, continue to have an increasing digital footprint. Technology brings incredible capabilities to our fingertips. Unfortunately, it also brings additional risk. Cyber insurance has become increasingly popular to mitigate the impact of data breaches, downed computers\networks and the losses that result.

What's Covered?

Cyber insurance is available in a variety of forms. In many cases you may add cyber coverage to an existing liability policy which provides a basic level of protection. For more robust coverage, standalone cyber policies offer the flexibility to customize coverages and limits to fit just about every business’s needs. See our article about common coverages and questions.

Cyber Liability

Covers claims arising from unauthorized access to data and failure to properly notify affected parties as required by law. Also may cover administrative and regulatory costs that result.  Some policies will provide coverage for copyright infringement and other forms of claims related to media content.

Incident Response

Provides experts to aid in breach response and mitigation along with coverage for the costs associated with addressing an incident. Many policies cover Cyber Extortion (Ransomware) as well. Various services may be included in response such as data restoration, public relations and improving your systems post breach.

Cyber Crime

Usually optional and not included on most endorsements – Cyber Crime provides coverage for loss due to unauthorized systems access, social engineering and fraudulent funds transfers.

Business Interuption

If your business is unable to operate due to a system disruption, intrusion or failure this coverage will help replace lost income while your systems are being restored. Options exist to extend coverage to you if a 3rd party system outage reduces your ability to operate as well as lost income due to reputational harm.

Additional Benefits

Cyber policies typically include multiple benefits beyond the core coverages described above. Insurance companies invest in their customers up front to help prevent cyber incidents from happening in the first place and will typically include access to a variety of resources such as:

  • Training & Tools – Many companies provide web portals and training materials to help businesses understand, assess and improve their security posture.
  • Security Assessments – Either automated or person driven assessments of your current security practices with recommendation on how to improve.
  • Access to Experts – Some companies offer free consultative sessions with cyber security experts.
  • Discounted Security Tools – Some companies will offer discounted rates on security products like endpoint protection suites.

Security isn’t something you buy, it’s something you do

Keep in Mind

Cyber policies are a newer insurance product and continue to evolve with the world around us. With that in mind, coverage options can vary significantly from company to company and you will want to speak with an agent knowledgeable in this field to help identify and secure the proper coverage for your business.

Many insurance agents out there are simply not familiar with the various risks businesses face which is fair since it can get pretty technical – make sure you work with someone who is well versed in this area.

For instance – many businesses will add an inexpensive endorsement to their general liability policy which provides some level of cyber coverage. In many cases this may be perfectly adequate but often times these endorsements have smaller limits and do not provide broad coverage leading to a false sense of security and exposures businesses are unaware of.