How to approach Cyber Insurance
• Assess your risks. Evaluate the specific threats your business faces based on your industry, size, and the type of data you handle. A healthcare provider handling sensitive patient data, for example, faces different risks and regulatory requirements than a retail e-commerce company.
• Understand your coverage. Traditional business policies rarely cover modern cyber risks adequately. Review what is and is not covered under a dedicated cyber liability policy, paying attention to details like first-party (your own losses) and third-party (liability to others) coverage.
• Consult a professional. Cyber insurance is a specialized field. A broker or expert such as Strong Tower Insurance Group can help you navigate different policy options, assess your risks accurately, and find a policy tailored to your unique business needs.
Examples of Cyber Insurance Claims
Common cyber insurance claims demonstrate how businesses can suffer significant financial and operational damage from various incidents. Examples often involve ransomware, phishing scams, business email compromise, and data breaches caused by external hackers or human error.
• Ransomware attacks – These attacks involve criminals encrypting a company’s data and demanding a ransom for the decryption key.
• Business email compromise (BEC) and social engineering – These scams rely on human error to trick an employee into performing a fraudulent action, such as wiring money to a criminal’s account.
• Data breaches – Data breaches occur when sensitive information is exposed, either through a malicious hack or an accidental leak
• Business interruption – Cyber insurance can cover lost income and extra expenses when a cyberattack halts a company’s operations.
Key trends in cyberattacks are significantly impacting insurance claims through more sophisticated and costly attacks, which are forcing insurers to adapt their policies. The most notable trends include the evolution of ransomware, the use of artificial intelligence (AI), an increase in supply chain attacks, and regulatory changes that increase liability.
Rise of AI-powered attacks
Generative AI is enabling criminals to execute more convincing and widespread attacks, creating new challenges for insurers and policyholders.
“Our insureds with mature cybersecurity programs that enable early detection and response are seeing a reduction in the financial impact of large losses. It is important to understand the policy language and our team at Strong Tower Insurance Group can assess the risks and explain the differences.”
Jared Gabbel, Vice President Strong Tower Insurance Group
For more information, contact Jared Gabbel at
https://strongtowerig.com/business-insurance/cyber-liability-insurance/
