Comprehensive Guide to Cyber Insurance
Published April 22, 2021 WRITTEN BY THE KIUWAN TEAMExperienced developers, cyber-security experts, ALM consultants, DevOps gurus and some other dangerous species. Social media, advanced technology, and the growing popularity of business transactions over the web continue to determine how organizations operate and communicate with their prospective customers. However, they’re also gateways to cyberattacks and data loss. Whether launched by criminals, insiders, or run-on-the-mill hackers, the likelihood of a cyberattack exists, and both small and established organizations face the risk of moderate or severe harm. As a component of their risk management strategy, companies now have to routinely decide the risks to accept, control, avoid, or transfer. Risk transfer is where cyber insurance policies come into play. What Is Cyber Insurance? It’s also called cyber liability insurance coverage (CLIC) or cyber risk insurance. In essence, the policy is designed to provide risk exposure mitigation to companies. It does this by offsetting any expenses the business incurs to recover after a security breach or any other cyber-related threat. The concept entered the market in the early 2000s and has its roots in E&O (errors and omissions) insurance. Very few providers existed then, and the main threats covered included network security, viruses, and unauthorized access. A lot has changed from its initial inception. For instance, the earlier iterations mainly focused on third-party indemnity coverage. But as years went by, providers began including first-party coverage for credit monitoring, notification, crisis management, public relations, and identity restoration. Earlier on, the first-party coverages were sub-limited, contrary to the full limits available in the market right now. Soon after, additional like PCI penalties and fines, regulatory penalties and fines, first-party business interruption, and cyber extortion followed later. The recent years have seen the inclusion of social engineering, system failure coverage, and property damage to devices and hardware. Different advancements in the coverage’s scope are witnessed every year. Types of Cyber Insurance Coverages Here are the different types of cybersecurity insurance coverages: Cyber Security Insurance It’s also referred to as the Crisis Management Expense or Privacy Notification coverage. The insurance product covers you and your business against first-party damage but not against damage to third-parties. It specifically takes care of the immediate response cost after a data breach. Some of these costs include: Contracting forensic experts to ascertain the breach’s origin and give suggestions on practical approaches to site security and future breach prevention Paying a public relations service to help address the crisis Informing everyone whose personally identifiable information is compromised Monitoring the victims’ credit for 12 months Compensating the cost of restoring stolen identities Cyber Liability It’s also called the Information Security and Privacy Insurance and covers liability for breach damages. Direct response costs aren’t covered. It’s ideal for e-commerce agencies and those that keep client data in their internal electronic network. Common breaches involve the following types of personal or financial data: Credit card numbers Social security numbers Bank account details Health information Intellectual property or trade secrets Technology Errors and Omissions Also called E&O or Professional Liability, the liability coverage protects corporates that offer technology products and services. It protects you from bearing the entire cost of defending yourself when a civil lawsuit awards damages after a customer’s negligence claim. Apart from the companies selling and servicing computer products, the insurance also includes advertising […]
