Cyber Liability Insurance

A cyber insurance policy, also referred to as “cyber liability insurance” coverage, is a financial product that allows businesses to shift the costs associated with recovery from a cyber-related security breach or similar events. Normally, the most important aspect of cyber insurance will be network security coverage. This form of coverage will help in case of a network security failure. Such failures include data breaches, malware, ransomware attacks and business account, and email compromises. Conversely, the policy will also respond to liability claims and additional expenses of an attack or breach. Frequently, these policies may also provide access to a panel of top-tier breach experts, a Cyber forensic staff, and other service providers.

If you handle or use digital information whether it is your information or another party’s information, we strongly encourage you to consider the value of cyber insurance.

Important questions to ask, is your business regulatorily or contractually responsible with regards to customers’ personal information. Do you or your business store customers data such as names, addresses, credit card information, Social Security numbers, on any type of computer system online or offline. If any of these examples are yes, then there is a regulatory obligation to keep that data secure. If you do not, there is a higher chance of you having liability to another party in the event of a breach.

Many are surprised to learn the real costs associated with a breach. According to qualified sources, cyberattacks cost small and medium-sized businesses an average of over two million dollars! Smaller businesses could be looking at 50-75K. The study also showed that 69 percent of the businesses that were polled said that attacks are becoming more severe and more sophisticated each year.

Does it sound like your business needs this type of protection / coverage? We can help. Priority Insurance, LLC can secure a quotation for cyber liability insurance in under 13 minutes.

Additionally, if your business’s revenue stream has any contact with European consumers or businesses, then the recently implemented General Data Protection Regulation (GDPR) likely applies to you. Many US-based businesses have already taken measures to be GDPR compliant but that doesn’t mean your insurance has followed suit.

Cyber insurance emerged as a result because other traditional business insurance policies were simply not created to cover the types of risks most associated with cyber insurance.

Therefore, many insurance experts will argue that cyber insurance policies are still in their infancy and a lot of work needs to be done when it comes to standardizing coverage and making sure that insurance carriers are able to support the needs of modern businesses. Not only that, but education is also important for businesses to understand the threat of cyber-attacks and the seriousness of these types of threats. A recent report from Homeland Security claims that seven (7) out of ten (10) firms do not have a quality cyber security strategy in place. There is no doubt that the cyber insurance space will continue to evolve rapidly and offers will certainly be expanded and customized. Also, as is the case with most other types of Insurance, cyber insurance policies are advancing towards more industry-specific solutions and becoming less general.

Cyber insurance is as dynamic as the companies it protects and is consequently far from standardized. All policies are different, so having the right advice is critical. Here at Priority Insurance, LLC we can help you through this process and help you customize the right protection for your company. Remember, Errors and Omissions insurance does not serve as a substitute for Cyber coverage.

Some of the concerns that cyber liability insurance typically addresses include:
• Data loss, recovery, and recreation
• Business interruption/ loss of revenue due to a breach
• Loss of transferred funds
• Computer fraud
• Cyber extortion

If a breach occurs and that breach exposes or steals personal information, such as Social Security numbers, driver’s’ license number, address, or bank account information, a cyber liability insurance policy pays for:
• Notification Costs: This expense is significant because the company bears the burden of both identifying potential victims, which requires an internal investigation, usually by a forensic firm, and providing notification that’s reasonably calculated to give actual notice.
• Credit Monitoring: In effect, your cyber insurance policy pays for victims’ insurance policies. Regulators usually dictate the kind of credit monitoring to provide and it’s a safe bet they have set guidelines on what monitoring companies they will allow. Normally it will not be with the cheapest available protection.
• Civil Damages: Most of these liability lawsuits are class actions, with hundreds of thousands of dollars in damages at a minimum, even for a very small company.
• Computer Forensics: This covers costs to hire computer forensics consultants working under the direction of your attorneys to determine whether a data breach occurred, to contain and prevent further damage, and to investigate the cause and scope of the breach.
• Reputational Damage: Data breaches can have profound PR implications for any business, large or small. A preferred policy will help you handle the potential fallout by covering the damages stemming from brand aversion due to a cyber incident. It can also help mitigate the potential cost by paying for PR management experts.

Ask yourself this question. Who in your business is going to deal with the South Carolina Department of Administration's Office of Technology and Information Services, the Division of Information Security (DIS) in trying to resolve a problem of a Cyber Breach? You or your Cyber Insurance Company?
https://www.consumer.sc.gov/identity-theft-unit/security-breaches

Cyber insurance providers also have a duty to defend policyholders from related administrative actions or liability lawsuits. For instance, cyber insurance will offer privacy liability coverage. This coverage is important for most companies, particularly those storing sensitive customer and employee information on their networks. Breaches that expose such information not only compromise those affected but may expose your business to liability lawsuits from victims of such cyber incidents. Also, it will provide coverage in cases where you’re alleged to have violated privacy laws.

Additionally, most policies also provide resources that help policyholders design cost-effective security and data encryption protocol. To further minimize liability risk

Like most insurance policies, there are certain exclusions that a cyber policy usually has and will not cover.

The policy will not respond if you are sued for any potential vulnerabilities in your systems before a breach occurs. This is very important for a business most notably, cyber insurance policies will typically not reimburse you for future profits lost due to a cyber-attack or data breach.

If you fear losses due to theft of your intellectual property, you’ll have to look towards a specifically tailored intellectual property insurance policy, not Cyber Insurance.

If an agent of a foreign power causes the breach, the coverage can be denied under the acts of war exclusion.

Additionally, the cost to improve your security and technology systems after an attack will not be included in most policies. When considering whether you’ll be covered for cyber-related exposures it’s crucial to understand the concept of “Silent Cyber”. Many traditional insurance policies, most notably general liability insurance (CGL), weren’t designed with cyber risks in mind. This means that they don’t have precise language that will implicitly include or exclude cyber exposures. However, in practice this means that CGL policies generally won’t cover cyber liability, and if they do the coverage will be minimal at best.

It’s also important to note that social engineering attacks can be considered a special case. Social engineering refers to attacks that rely on psychological manipulation to gain access to sensitive information or funds. Victims following instructions from fraudulent emails or calls is not considered a computer system breach. This type of coverage will require a special policy social engineering extension added to the cyber insurance policy.

It is best to let one of our advisers help you understand the details of coverage.

A deductible is a fixed amount of money you’ll have to pay before your coverage kicks in and starts paying. Like most insurance policies, cyber liability insurance does have a deductible. You may select the amount of your deductible when securing the coverage from a range offered by the insurance company. It is applied each time your cyber insurance policy covers a loss. If you go for a higher deductible, you’ll be able to secure lower premiums.

It’s best to shop for this type of insurance by coverage as opposed to cost.

Your company’s sophistication and ability to avoid an incident and coverage limit are the two biggest factors in determining premium costs, as well as revenue and number of records stored or maintained on the insured’s systems.
However, when looking at the potential exposure from a data breach you will soon learn that this type of coverage is well worth the investment. Also, with the amount of cyber incidences occurring and increasing nationally, this coverage is currently a very good value.

Affordable.
We are an insurance broker and will shop and compare many carriers to find the right fit for your company. Once we gather your specific information, we will contact major players in this area and pick what we think is the best three (3) companies for your risk and present them to you.

Easy.
We’ve made it easier to secure cyber liability and data breach insurance. We do all the heavy lifting once we understand your specific risk. We work with the insurance carriers to assess the risk and help you find the coverage that best works for your business’s exposure.

Protect your business with the broadest coverage in the industry. You can tailor your cyber policy to your needs by choosing your own limits and coverage.

Human.
We provide you with expert support no matter your questions. Talking to a person for many people is still the preferred choice in communication. We understand and are trained to help you secure the best possible outcome for your company. That is what we do and that is our business model.