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Are There Holes in Your Cyber Insurance Coverage?

Are There Holes in Your Cyber Insurance CoverageIncreasingly more firms are realizing the true value of Cyber Liability insurance to address their exposures to computer fraud or attacks. This goes beyond just large corporations who rank cyber among the top risks they face today. Small and mid-sized businesses in fact are now beginning to understand the extent of their risk and how a cyber incident can not only affect their bottom line but also their reputation among customers and industry colleagues. These businesses face a number of threats, including the growth of mobile malware, data theft from the Internet of things (IoT) devices (wearable devices, for example), cyber espionage, extortion attacks, and stolen data aggregation, among others.

To addresses these risks, many companies purchase Cyber coverage, but when doing so, it is imperative to work with an expert familiar with the policies available in the insurance market – a professional who can properly negotiate policy terms and pricing. If not properly negotiated, you could be left with coverage gaps and limited protection against the exposures you face.

What type of gaps may exist? One common gap is lack of coverage for social engineering fraud – what is known as phishing or spoofing. Phishing scams are typically fraudulent email messages that appear to come from legitimate enterprises (your customer, vendor, bank). These messages usually direct you to divulge private information or wire transfer money to an account you believe is legitimate. They mimic emails you have received before by trusted parties. In fact, the FBI estimates that companies across the globe lost more than $1 billion from October 2013 through June 2015 as a result of business email fraud. What is important to note here is that if you may not be covered for this unless the exposure is specifically included and/or requested by endorsement in your Cyber policy. In many cases, a policy may exclude this type of fraud. It’s important to determine whether you have coverage for social engineering fraud either in your Cyber or Crime policy.

Another area of concern includes not only understanding what is exactly covered, as there is no standard Cyber policy form out there, but also knowing when coverage is triggered. An experienced Cyber insurance expert can go over this with you so that if an incident occurs, you’ll understand if and when the claim is covered.

Also important is understanding how your Cyber insurance coverage works with your other insurance policies. Depending on the losses and/or allegations, several other types of insurance policies may also respond to a cyber-related claim. Coordinating limits, retentions, deductibles and other coverage requirements is important.

Axis Insurance Services specializes in Privacy & Network Security/Cyber Liability insurance coverage and works with top insurance markets to design and procure the appropriate policy for our clients. We also specialize in Crime insurance. We would be happy to review your cyber risks and assist you in putting in place an insurance program that responds to your needs. Give us a call at (877) 787-5258.

 

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Blogged on: January 22, 2016 by Mike Smith
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