Everything You Need To Know About Cyber Risk Insurance

Haven’t invested in cyber risk insurance yet? Or maybe you have, and your policy is renewing soon—either way, you shouldn’t put off the process of assessing your cybersecurity to ensure you qualify for ongoing coverage.

Webinar: Everything You Need To Know About Cyber Risk Insurance

Haven’t invested in cyber risk insurance yet? Or maybe you have, and your policy is renewing soon—either way, you shouldn’t put off the process of assessing your cybersecurity to ensure you qualify for ongoing coverage.

Your cyber risk insurance policy covers your costs of recovery after you get hit by malware. Cyber risk insurance plays a key part in your response to threats like ransomware.

Find out everything you need to know about cyber risk insurance in our latest webinar, presented by professionals from Cragin & Pike Insurance Services, Socius Insurance Services, and Orbis Solutions:

YouTube video

The 2 Types Of Cyber Risk Insurance Policies

For the most part, modern cyber risk insurance policies break down in one of two ways as to what they cover:

1st Party

Largely the most sought-after form of coverage, this type of policy is concerned directly with damages suffered by the insured.

  1. Breach Response Costs (Breach Coach, Forensic Expenses, Privacy Notifications, etc.)
  2. Hacker Damage (data restoration or system restoration)
  3. PCI Fines, Penalties & Assessments
  4. Cybercrime & Social engineering
  5. System Business Interruption (F-BI, C-BI, SF, C-SF)
  6. Reputational Harm
  7. Cyber Extortion (Ransomware)

3rd Party

This type of policy covers situations in which an event has occurred and a third party is alleging financial loss and that the insured is at fault.

  1. Network Security & Privacy Liability
  2. Media Liability
  3. Regulatory Investigations fines & penalties (OCR, FTC, SEC, GDPR)

Key Trends In Cyber Risk Insurance Claims

The most prevalent trend over the past year and a half is the move to a remote work environment. Cybercrime is even more of a concern in the remote working environment during this pandemic.

CISA has issued a warning to US businesses about the increase in phishing and other social engineering scams over the past few weeks. CNN is reporting a 500% increase in phishing attacks since the start of the COVID-19 pandemic.

These attacks are exploiting the COVID-19 pandemic, targeting unsecured users working from home, and offering false information about the crisis in order to take advantage of them.

A leading carrier's findings indicate that ransomware (41%), funds transfer loss (27%), and business email compromise incidents (19%) were the most frequent types of loss accounting for 87% of reported incidents and 84% of claims payouts in the first half of 2020.

As a majority of businesses have transitioned to remote work, exploitation of remote access was the root cause of many reported ransomware incidents—the FBI reported a 300% increase in cybercrime.

Ransomware has become a key threat. It feels like no more than a few days go by without another ransomware story in the news. What used to be just one threat present in the cybercrime landscape has now become the clearest and present danger to modern businesses.

Don’t assume we’re exaggerating this for effect—experts estimate that a ransomware attack will occur every 11 seconds in 2021. It’s almost a total certainty that you will be attacked with ransomware at some point, and possibly even infected. That’s why you need to take action and defend yourself.

Can Insurance Help You Recover From A Ransomware Attack?

The core issue is that as cybercrime becomes more common and more damaging, insurers are raising their cybersecurity standards. Furthermore, in the case of ransomware, they may not even be allowed to cover the ransom. In some instances, paying the ransom may be illegal, as it may fund a known party that has been deemed dangerous by the US government.

The fact is that your policy may not be as comprehensive as you assume:

  • Coverage may be limited to attacks and fails to address human error
  • Claims may be limited to losses that result directly from network interruption, and not the entire period of business disruption
  • Claims related to third-party contractors and outsourced service providers may be denied

Furthermore, any gaps in your cybersecurity may undercut your right to a payout. That’s why you need to make sure you meet minimum requirements…

5 Questions You Need To Ask About Your Cybersecurity

  1. Do you have Multi-Factor Authentication for email and sensitive information?
  2. Do you have data backups and are you sure they are working?
  3. Do you have up-to-date, active antivirus installed on all computers?
  4. Do you have a written and documented breach response plan?
  5. Do you have up-to-date, active firewall technology?

Making Assumptions About Your Cyber Risk Insurance Could Cost You Thousands…

Cyber insurance can be complicated.

What type of policy you can qualify for depends directly on your cybersecurity. Whether you can even make a claim in the event of an incident may not be as clear-cut as you assume.

For expert assistance, get in touch with the Orbis Solutions team.

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