Broker Focus: Cyber Insurance

We spoke to the Senior Vice-President at PROLINK, Michael Loeters, and asked him what the main issues are when trying to sell Cyber insurance:



"What is Cyber Insurance?"

Michael Loeters (PROLINK): "Cyber coverage has three components. The first component has what we call third party liability. Third party liability is the part of the policy that's going to protect you from an allegation by a third party or a group of third parties that you didn't take all reasonable measures to protect them through having good and reasonable controls as far as the security of your network and your data. 

The second part of it is what we call first party coverages. That is a group of coverages that cover all the costs that you are going to incur to now deal with this breach. That's everything from the cost of notifying somebody that their information was breached; to loss of business income if you have to shut your business down for a period of time; if it's cyber extortion or a ransomware type of event, the cost of dealing with that and potentially paying the ransomware; to many other coverages. So there's lots of things packed up in that but it all deals with costs.

Lastly, and probably the piece that's most under-appreciated is the post-breach services. What most insurance carriers have done is create a panel of vendors that are pre-selected and pre-qualified that will step in very quickly and will provide all of the professional services that you need to help you manage the crisis."

"Who Needs Cyber Insurance?"

ML: "Cyber risk is probably the fastest growing risk today. and that's because we live in a very networked, digital, data-driven world. Every company or every organization for that matter, no matter what they're doing, no matter what their size, is basically a technology company today. So the answer is really 'everybody'."

"What Challenges Do Brokers Face Regarding Cyber Insurance?"

ML: "I think the challenge for the broker is that it's a very complex coverage. It's a bunch of pieces that you put together, it's highly customizable. Because there's no standardized wording it's not like a General Liability policy that's been in place for decades and the basic form is the same. With Cyber it's not like that. Everybody structures their policy quite differently. So the challenge for a broker is trying to look at the different options they're trying to present to the consumer and figure out what the differences actually are. And it also requires you to have a tremendous amount of knowledge and insight into the business of your client so that you know how to properly customize that product to their needs."


You can browse our current range of Cyber products here.