Cyber Insurance – How Important Is It?

Cyber attacks have increased throughout the years, but within the past year, more people are becoming aware of how important it is. Many are turning to cyber insurance as a means of protection against some of the effects of an incident,
but what is cyber insurance and how does it work?
We’re here to go over what you need to know with the help of Hardenbergh Insurance Group.

Hardenbergh Insurance states, “For many years now, there has been awareness that companies should be accountable for the safeguarding of the personally identifiable information of their customers.  One particular law that helped to raise awareness was the Health Insurance Portability and Accountability Act (HIPPA) of 1996.  The vast majority of states have amended their state laws to address how companies and state agencies must respond to a security breach that results the compromise or potential compromise of personally identifiable information.  Most state laws dictate that in the event of a breach, not only must the organization notify the affected individuals, but also the specific state agency.”

Businesses such as health care providers, banks, law firms, accountants, hotels, retail stores, schools, public entities, charitable organizations, mortgage brokers, insurance agents, and other professional service providers, restaurants and any other business that maintains records of personally identifiable information all have a cyber liability exposure.

Today, the vast majority of businesses rely on their computer systems to run their business and to service their customers.  The inability to operate their computer system due to a cyber attack can cause severe financial damage to the organization.

What Is Cyber Insurance?

Cyber insurance, also known as cyber-liability insurance, is an insurance policy that helps protect organizations from the fallout from cyberattacks and hacking threats. Having cyber insurance protect against losses that are related to computer- or network-based incident.

Any business with an online component or one that sends or stores electronic data might benefit from cyber insurance.

What Does Cyber Insurance Cover

Key first party insuring agreements include the following:

  • Cyber Extortion – Costs to investigate, negotiate and settle threats made against the insured related to intentional computer attacks
  • Privacy Breach Response – Expenses for breach response services such as notification, credit monitoring and identity/credit repair
  • Business Interruption – Loss of income due to interruptions in business caused by breaches of an organizations network
  • Crisis Management – Expense of retaining a public relations firm to help mitigate damage to the organizations reputation and brand image caused by a cyber attack

Key third party insuring agreements include the following:

  • Technology Errors & Omissions – Error or omission in the performance of technology services resulting in third-party loss.
  • Privacy Liability – Failure to protect private or confidential information.
  • Security Liability – Failure of network and information security to prevent the transmission of computer viruses.
  • Media/Content Liability – Libel, slander, and other forms of disparagement, etc. with respect to the display of materials as well as infringement of a copyright by your website content.
  • Regulatory Actions – Regulatory actions brought by state or federal agencies to enforce privacy regulations.

Not all cyber liability insurance policies are the same.  Coverages can and will vary depending on the carrier and the insuring agreements purchased.  When evaluating which cyber liability policy is appropriate for your organization, it is important to evaluate both the first party insuring agreements and third party insuring agreements being offered.

When evaluating cyber liability alternatives for your business, it is crucial to be sure that the policy you select to protect your business contains the appropriate insuring agreements.  The Risk Management professionals at Hardenbergh Insurance Group can work with you to evaluate your exposure and to ensure that the appropriate coverage is in place to protect your business.

Most businesses are requiring clients to get cyber insurance. 

Cyber Risk Management Techniques That Can Be Implemented To Protect Your Organization From Cyber Attacks Said By Hardenbergh Insurance Group: