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Tips on Cyber Insurance

August 4th, 2023 by admin

 Close up of someone writing in a notebook while holding a tablet in the other hand, with a web containing lock icons displayed over top of it to represent cyber insurance.

Cyber-attacks are becoming more frequent. The damage from these attacks can be catastrophic to your business. Many companies are realizing the importance of having a cyber insurance policy. Here are some things you should know about cyber insurance and protecting your important data and infrastructure.

Not Included in Commercial Policies

Many people make the mistake of assuming recovering damages from a cyber event is covered under their normal commercial liability policy. It is not. You need to have a different policy that focuses strictly on losses due to cyber theft, cyber-attacks and other events that affect your data and infrastructure.

What Coverage Do You Need?

Many people think of cyber extortion and ransom payments as reasons to have a policy. That is true, but you also need to think of other costs involved. Things like:

  • Business interruption costs if you cannot operate and generate revenue for a period of time.
  • Loss of reputation if having news of a data breach will hurt your company.
  • Cost of remediation to rebuild and recover your lost data.
  • Errors and omissions if your mistake can cause damage to others regarding their information.
  • Breach response coverage if you have expenses related to notifying others of your data breach and paying for credit monitoring services to protect those whose information was exposed.

Be sure to talk to a cyber insurance professional so you fully understand what coverage is appropriate for your business and what levels of protection you should carry.

Read Your Terms & Conditions

Cyber insurance is a little bit more complicated in both the application process and the requirements needed for filing a claim than normal commercial insurance. The application process will require a detailed description of the volume and type of data you store, a listing of your security practices and security tools used to protect your data. These need to be answered truthfully. Claims can be denied if you were not using the security protocols you listed on the application.

In the event of a potential claim, read your policy for requirements regarding notifications and proper response. Many policies require notification within 24-48 hours of a breach. If you are outside of that time frame, your claim can be denied.

In the event of an attack, your first move should always be stopping the spread of the attack. Your second move should be contacting your insurance company. They often have hot lines set up to help limit damage, determine the extent of damage, and negotiate on your behalf to reduce the ransom. Do not try to remediate or fix anything before you contact the insurance company.

Do I Need Coverage?

Many people incorrectly believe that if someone else is responsible for their network and supplying security, they do not need the coverage. That is not true. Most security breaches are still caused by human error such as an employee clicking on a link that causes the attack. Most E & O policies held by the IT provider would not cover a claim caused by a cybercriminal or an employee that is not their employee. It is best to make sure you are covered.

The Best Insurance

What insurance is right for you and your business is something you should discuss with an experienced insurance professional. They can help you make sure the policy will cover you when you need it.

Remember, cyber insurance is important, but the best policy is to avoid an attack with a solid cyber defense and good security practices. If you would like to know what security vulnerabilities you may have, please contact us for a free network security assessment. For more information visit Network Assessment.

Download Cyber Insurance and Why Your Small Business Needs Coverage Infographic

Disclaimer: Lang Company is not affiliated with, nor do we endorse any specific cyber insurance company. This post is for informational purposes only. Please consult with your Cyber Insurance professional to determine what type of coverage is appropriate for your organization.

Posted in: Cyber Security