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Cyber Insurance protects business and individuals from information technology and internet sourced risk of loss, theft, or destruction of digital assets. As we rely increasingly on computers, emails, and the internet for business, client, and payment methods; the risk of cyber-attack/ cybercrime increases exponentially. As technology advances, the nature of our assets shift from physical to electronic and digital. This change has left some of our most valuable assets at risk of being accessed by anyone from anywhere around the world. As we rely more and more everyday on digital assets such as systems, data, and electronic funds; the need for policies to protect them becomes essential in today’s business world.
The top 3 types of Cyber-attacks most claims fall under are
- Theft of funds 29%
- Ransomware 21%
- Data Breach 18%
Not all policies include Theft of Funds, and they can vary in coverage offered. With this being the greatest issue facing businesses today, it is important to get a policy that covers this form of Cybercrime.
Most cyber policies are divided into two main categories; 1st party and 3rd party coverage. 1st party coverage covers a client’s direct expense to get back in business after a breach. A good policy will also have 3rd party liability that will pay for the expenses incurred to notify clients that their data has been breached.
1st party coverage (Losses to your business)
- Incident Response/ Breach Notification/ Forensic Investigation
Should cover costs involved in responding to cyber incident in real time, providing access to the right specialist as well as paying for their services
- Cyber Extortion
Costs responding to frauds attempting to extort money, Ransomware, any extortion type of cybercrime
- System damage/ Data loss/ Restoration
Costs to get data repaired and reinstated
- System Business Interruption
Aims to reimburse loss of profits and increased costs of working resulting from a cybercrime (very similar to traditional business interruption insurance)
3rd party coverage (Losses to others/ losses to your clients)
- Network Security and Privacy Liability
Covers 3rd party claims arising out of a cyber event
- Regulatory Fines
Covers the cost of fines and penalties that certain regulatory bodies might enforce on organizations
- Media Liability
Covers any third party claims arising out of defamation or infringement of intellectual property rights.
Check out out latest blog post to learn more about COVID-19 and the need for Cyber Insurance.