Do Your Clients Have Questions About Cyber Insurance? We Have Answers!
Part of an insurance broker’s job is making sure his or her clients understand the importance of getting coverage. This is especially true when it comes to cyber insurance policies. Having the right cyber coverage is a critical part of a comprehensive cyber security plan for any business. Learn the questions clients most often ask about cyber insurance policies so you can make sure they get the right information and the right cyber coverage.
FAQs About Cyber Insurance Policies
What is cyber insurance?
This is a question brokers often get, and while it may seem elementary, it’s useful to have a clear and concise answer for clients. In essence, cyber insurance is a type of insurance product designed to mitigate losses from malign cyber activity. This includes:
- Data breaches
- Phishing attacks
- Denial of service attacks
- Ransomware/cyber extortion
Who needs cyber insurance?
Anyone who asks this question should know that any business that holds Personally Identifiable Information (PII) should have cyber liability insurance. PII includes:
- Credit cards
- Social security numbers
- Banking information
- Drivers licenses
- Medical information covered under HIPAA
- Confidential corporate information
Even if a business uses a third party provider to handle most of your customers’ Personally Identifiable Information, that business is still legally liable in the event of a data breach.
How likely am I to be attacked?
Some businesses tell us they don’t think a cyber attack is likely. This “it will never happen to me” mentality is exactly what hackers are hoping for. They’re hoping businesses don’t have adequate cyber security or cyber insurance policies in place.
Unfortunately, an attack is more likely than many may think. In Q3 of 2017, 79% of companies experienced a severe cyber attack. That number is only expected to grow as cyber criminals continue to increase the number and sophistication of their cyber attacks.
I’m a small business. Does that mean I’m safer from an attack?
Some small businesses feel they’re safer from attack because they can operate “under the radar” and go undetected by cyber criminals. The fact that only big corporations get widespread media attention when they’re attacked seems to support this.
In reality, a small business is not safer from cyber attacks. In fact, small and medium-sized businesses are often targeted more than larger companies. Cyber criminals find them to be more attractive targets because they tend to have fewer security measures and hackers can automate attacks for very little cost.
Will I know if I’ve been breached?
Unfortunately, hackers don’t typically send an email or text message when they’ve compromised your system. In fact, cyber criminals take steps to disguise the fact their target has been breached.
Worryingly, it takes companies as long as 200 days to discover there’s been a breach. Even more worrying is the fact that 60% of data is stolen within the first few hours. If a business gets attacked, it could be months they find out, and by then, it’s far too late.
Is cyber coverage already included in my commercial general liability insurance (CGL)?
Clients are sometimes under the impression that commercial general liability insurance protects them in the event of a cyber attack.
In reality, most general liability insurance policies are not designed to cover a cyber breach. When you see companies on the news being denied coverage, it’s usually because they’re trying to use a general liability insurance policy instead of a cyber insurance policy. It’s important for businesses to have the right coverage to make sure they’re protected in the event of a cyber attack.
What does the insurance cover?
Cyber insurance has never been more broad and comprehensive. While cyber insurance policies can cover a wide range of industry-specific exposures, it’s helpful to know a few of the most common features in case your clients ask. Cyber insurance policies typically cover both first party and third party exposures, including:
- Forensic IT costs
- Credit protection costs
- Notification costs
- Network security breaches
- Negligent 3rd party protection of data
- Fines, penalties, and assessments
In addition to the immediate costs, there are also a lot of latent costs associated with a breach. For instance, most people understand the immediate cost of extortion when ransomware infects a computer or network and holds it hostage. But the cost of a ransomware attack can far exceed the extortion price when you consider the business interruption costs as well as the costs to rebuild your network and electronic data. Cyber attacks also cause damage to a businesses’ reputation in a way that is often very costly to rebuild. These costs can incapacitate any business without insurance coverage to help manage the fallout and cover the costs.
Even if an employee caused the attack by opening an email or clicking on a malicious link, that business is covered by cyber insurance. To learn more about what’s covered, visit our the ProWriters web page on cyber insurance policies.
Having answers to these frequently asked questions about cyber insurance policies can help ensure your clients understand the importance of cyber insurance. To learn more about how you can find the right policy for your client, contact an expert ProWriters today.