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Cyber Risk Insurance: It’s All in the Details


Cyber Risk Insurance: It’s All in the DetailsThere’s a lot of talk about the need for cyber liability insurance as result of the proliferation of data breaches across all industries. In fact, in our blog, we’re continuously reminding our clients about the need for risk management and cyber insurance protection. But one thing must be noted…cyber insurance should be tailored specifically to the customer and the industry you serve.

For example, if you’re in the healthcare, e-commerce, or professional services industries (legal, accounting, insurance), your customers’ privacy is high on the list of your issues. Do you provide services to others for compensation? Then your technology E&O exposure needs to also be addressed. Also, some Cyber policies do not offer regulatory coverage, putting a client in a highly regulated industry in a very vulnerable position.

Another area to look at when reviewing cyber insurance is the defense coverage option. Do you choose duty to defend or duty to pay? This will depend on the size of your company, and its ability and desire to manage the litigation process. In addition, it’s critical to look at the cyber policy language describing your obligations and that of the insurance company in the event you both don’t agree on whether to settle a claim.

Reviewing whether there are proper sub-limits in each of the individual coverage parts of a cyber policy is also crucial. Notification expenses and PR expenses to minimize reputational damage include sub-limits, and need to adequately reflect your risk exposure. What’s more, depending on the policy, there may also be coverage available for costs of credit monitor­ing offered to breach victims.

These are just some of the issues that need to be addressed and tailored when securing a Cyber Risk insurance policy. At Axis Insurance Services, LLC, our cyber security insurance specialists can work with you to reduce your upfront exposure, develop effective new processes and procedures to minimize your risks, and help protect you against financial loss with a tailored policy. Give us a call at (877) 787-5258.

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Blogged on: April 24, 2012 by Mike Smith
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