What exactly is Cyber Liability ?
The most basic explanation of Cyber Liability Insurance is that it covers you from getting hacked. Most, if not all businesses need cyber liability coverage. According to Alex Wittenberg, “The U.S. remains the largest cyber insurance market, where nearly 20 percent of all organizations have cyber insurance and there are yearly increases in the number of companies purchasing cyber insurance and increases in the limits”.
Here is a short list of things you are going to want to know in order to determine if your client is in need of cyber liability coverage, which is especially relevant in determining desirability of risk.
- What kind of data do they collect? Are they taking online payments from credit cards? Do they collect health or personal information in any way?
- Where is all this data stored? Are they cloud based, server based, in house etc.
- Who has access to the data? How many different persons have access to this data?
- What is the applicants policies and procedures for getting rid of old data? Where does it go and who is charged with deleting?
- Has anyone ever hacked or breached their security measures?
According to a recent Hiscox study on cyber liability, the the average cost of the largest cyber security incident experienced in the past 12 months was between €22,000 for the very smallest German companies to $102,000 for the largest U.S. companies. Some of the larger numbers globally are from $500,000 and up.
Cyber liability Insurance Coverage
First all, cyber liability usually covers expenses incurred by first party and third party claims. There isn’t really a standard for underwriting these types of policies, but the coverage is generally similar across the board, including:
Forensics – finding out what happened, how it happened, how to fix it etc.
Business loss – there may be similar to some items covered by E&O, including monetary losses, business interruption, recovery costs and more.
Lawsuits – coverage if someone decides to sue for damages or for other reason.
Privacy Notifications – for the most part, there are notifications that need to be sent to everyone regarding a breach in privacy. These, of course, have costs associated as well.
For more information or help, you can contact Southern Insurance Underwriters @ www.siuins.com or firstname.lastname@example.org