Getting To Grips With Cyber Insurance

‘Cyber attack’ has become a commonly used phrase by brokers to describe a data breach. As Cyber attacks are becoming more varied with a wider range of victims becoming targets, exactly what is meant by this phrase and who is potentially at risk?

As most individuals and organizations store information electronically, more people are becoming prone to having their data compromised. In short, if you store any data electronically then you are at risk of a breach.

The need for Cyber coverage arose during the 1990s with the growth of internet businesses storing large amounts of sensitive data such as addresses, social security numbers and bank details. As the data grew, so did the need for securing it. Hackers seized this opportunity and were soon able to gain unauthorized entry to online databases.

A Cyber crime is not just the illegal access of digital data but the corruption, publication, destruction and extortion of it. As Cyber attacks come in all sorts of shapes and sizes it can make a breach hard to recognize.
 

Identifying a Cyber threat

 

As the term ‘Cyber’ has become immediately recognisable in its own right, it too has a vocabulary all of its own:

• a ‘data breach’ is when secure data is compromised by a hacker which could be stolen, corrupted, or sold to a third party.
• ‘identity theft’ is when personal information, such as a bank details or an address, is stolen or cloned, potentially resulting in theft of funds or fraud.
• ‘phishing’ is a type of scam, usually via a spoof e-mail, that attempts to trick people into disclosing personal information, such as addresses and banking details. This may result in data being wiped, corrupted or altered, such as passwords, log-in details or personal files.
• a ‘virus’ is a commonly used term to describe the variety of malicious software used to infect networks and drives passed on through suspicious downloads and corrupted files, eg malware, adware, spyware, ransomware and trojan horses.

 

Victims of Cyber

 

Large organizations and businesses are traditionally the primary targets of hackers. As storers of large amounts of confidential information, all it takes is for one weak entry point to become vulnerable to Cyber criminals.

However, whilst hackers mainly target large businesses, SMEs and even healthcare organizations have become the recent victims of Cyber crime. Whilst small businesses also hold large amounts of confidential data, they are less likely to spend money on security controls and encryption than a larger business. This therefore makes them easier to hack.

Once a breach has occurred it may cause a significant amount of damage to the credibility of the company concerned. Confidence may be lost if companies cannot be trusted to encode and store data securely enough, resulting in a loss of business or further lawsuits. Hackers may also cause other damage such as impersonatiions in order to give out false or defamatory information to deliberately compromise the reputation of a company.

 

Protecting you and your client

 

As new types of Cyber attack occur every day, it is important for insurance companies to keep their policies relevant and up to date. Many clients could miss out because not every eventuality has been considered or potential risks sufficiently covered when a new type of attack is reported.

Brokers also need to ensure that their clients are taking enough precautions in order to prevent a Cyber attack. Important questions to ask are: What sort of response is in place in the case of a data breach? Is the security software kept up to date? Are there large amounts of confidential information stored? What sort of back-up system is there and will it store the information using a separate server?

 

Choosing Cyber coverage

 

Cyber can be divided into major components; first party coverage and third party coverage.

First party coverage is aimed at clients who want financial protection if their systems have been breached.

Third party coverage concerns lawsuits from those who may sue a business or individual if they fail to store their data securely or if there are any communication liability issues.

The risks areas normally included in a typical policy should include protection against a business interruption, financial loss and loss of earnings, privacy liability, first and third party notification costs, technology errors and omissions, multimedia liability and legal expenses.

 

Finding Cyber products

 

As one of the most underinsured risk areas, brokers across Canada are gradually realising the potential of this still underserved area. The rise of Cyber related products has risen dramatically over the past several years, yet many brokers are still struggling to educate themselves on what is available as well as how to cover their clients correctly.

Due to the rapidly growing emergence of this risk area, research for what is currently available can no longer be relied on traditional print directories or previous relationships with favourite insurance companies. As new products are created and updated all of the time, a solution is needed to source these new policies as quickly and efficiently as possible.

One such solution is Insurr, an online resource for specialty insurance products. As an online directory our free to use website allows brokers to search for those unusual and hard to place risks. Announcing ‘Cyber’ as our most popular search term, Insurr features over 20 individual Cyber-related product listings.

With new products added on a daily basis, a live chat facility and instant updates to product listings, Insurr has quickly become the most up-to-date and comprehensive resource available for specialty insurance brokers. Placing a Cyber risk for even the most under-educated broker will now be as easy as a price comparison search on Google. Featuring top level details in a standardized format, Insurr is able to display a wide range of results instantly compared to what would previously have taken hours of research.

Brokers can sign-up to Insurr for free to gain immediate access to the large number of specialty products, including Cyber, already available.


Other pages of interest:

Culture vital to mitigating cyber risk by Insurance Business on October 15, 2017

What should Australian companies be doing right now to protect our privacy by David Glance on October 9, 2017

How much can cyber liability insurance cost your business? by Richard Laycock (CSO Online) on July 21, 2017