The shift toward digital operations in the business world is not just a trend but a vital evolution. However, with the many benefits of a connected, online enterprise come a slew of risks that traditional insurance packages, such as Business Owner’s Policy (BOP) Coverage Insurance, may not address. This gap has led to the increasing importance of Cyber Insurance for businesses, and it’s time for brokers to embrace this crucial aspect of modern insurance coverage.
Why Is Cyber Insurance Important?
A 2022 Official Cybercrime Report by Cybersecurity Ventures predicted the global annual cost of cyber crime will reach $8 trillion in 2023—an amount greater than the annual GDP of every nation on Earth, barring China and the United States. And the cost of cyber crime isn’t expected to slow down, with damages projected to reach $10.5 trillion by 2025. Along with significant financial losses, businesses of all sizes may suffer reputational harm and lawsuits from affected customers.
Offering Cyber Insurance means your agency provides essential protection against these modern challenges, safeguarding your clients’ financial and operational stability.
How Misconceptions About BOPs Can Affect Insurance Brokers
Many businesses erroneously think that cyber threats are already covered under their BOP. But what does a Business Owner’s Policy cover? Typically, BOP Coverage Insurance addresses property damage, liability, and other conventional business risks. Cyber threats often fall outside this umbrella.
Miscommunication and misinformation about BOPs can lead to a significant increase in Errors and Ommision (E&O) exposure for brokers. If clients believe that their BOP covers cyber threats and later discover that it doesn’t, brokers can find themselves in legal hot water.
In many cases, agencies can avoid E&O claims simply by offering the insured a broad standalone cyber policy.
The Imperative for Brokers
For insurance brokers, offering Cyber Insurance is not just about providing protection to clients but also about mitigating their own E&O risks. Here’s how you can do that.
Treat Cyber Insurance as a Stand-Alone Necessity
Some agencies aren’t fully aware of the importance of Cyber Insurance for businesses. As such, they might offer Cyber Insurance only when asked about it, considering it a mere add-on to their existing services. But this approach underestimates the urgency of the matter and could expose brokers to lawsuits. Cyber Insurance shouldn’t be an afterthought; it must be a prominent feature of your agency’s offerings, reflecting its importance in the modern business environment.
Educate Your Clients on What Their Policy Covers
Insurance brokers are in a unique position to both educate and protect their clients. By informing clients why Cyber Insurance is important, brokers can ensure that they understand the nuances of their coverage. A well-informed client can make better decisions regarding their
protection strategies, and a broker who provides essential education can establish a reputation as a trusted adviser. Some common Cyber policy coverages include expenses related to business interruptions, crisis management, forensic investigations, and security breaches.
Customize Your Insurance Offering
Businesses face various cyber threats, depending on their industry, size, and technological infrastructure. This diversity underscores the importance of a customized Cyber Insurance policy. A tailored policy ensures coverage aligns with a company’s specific vulnerabilities, protecting against unique risks and potential impacts.
For instance, a data-driven firm may require robust coverage for privacy and security breaches, while an e-commerce business might prioritize coverage for business interruption. Customized Cyber Insurance offers precise protection, maximizing value and confidence for businesses in our ever-evolving digital landscape.
ProWriters Can Help You Protect Your Clients and Your Agency
It’s not difficult to see why Cyber Insurance is important; it protects your clients and your agency.
With ProWriters, you can offer a comprehensive defense against unseen digital dangers. We have numerous resources and plans to help you provide the ideal coverage for your clients.
While Cyber Insurance is essential for modern businesses, it’s not always an easy sell. If you need help convincing more clients to sign up for Cyber Insurance, get help from our FREE eBook—How to Sell Cyber: Big Claims in Ransomware & Social Engineering.
Take the lead in educating businesses about cyber threats. Join ProWriters today and be an advocate for Cyber Insurance!