With cyber attacks severely increasing and showing no signs of slowing down, it is important for businesses and individuals to know their cyber insurance options and ask their insurance agency/broker any questions they may have. Being prepared is the first step to mitigating loss from a cyber attack and protecting your company's data.
Cyber insurance is a professional liability policy that provides coverage and protection for many different cyber exposures, such as the following:
Anyone that operates a business, from a small business to a large corporation, needs cyber liability insurance due to the significant risk of exposure to cyber attacks. It's not if you are going to get hacked, it's when you are going to get hacked.
Insurance carriers are noticing a need for personal cyber insurance for individuals, but coverage options are different from those available to a business.
Hackers try to infiltrate anywhere they can, and if a company does not take preventative measures— such as using multi-factor authentication and strong passphrases— to lock down their systems, they are left extremely vulnerable to cyber attacks. Using third-party vendors can also leave your company exposed because if the vendor has a data breach, your company's information is now in the hands of the hacker.
Key considerations for large corporations:
Any company without a good IT infrastructure in place becomes prime for cyber hacks and ransomware attacks.
In the business world, it is becoming standard practice to require cyber insurance in contractual agreements. More contracts require companies to have cyber insurance in place to do business, especially for government-contracted work.
Companies looking to purchase cyber insurance should use an insurance broker because cyber policies include many nuances, differences, and potentially confusing information, all of which a broker can shed light on.
Individuals cannot purchase cyber insurance like a corporation or entity can. Individual options include third-party cyber insurance companies, such as LifeLock, or insurance through a bank, if they offer cyber coverage. However, many insurance carriers have begun providing cyber coverage for individuals for exposures such as identity theft, information hacking, online harassment, cyber bullying, and defamation lawsuits. In some cases, individuals who have amassed significant wealth are advised to obtain cyber liability insurance in case they become the targets of a ransomware attack.
It is important to choose an insurance broker or an insurance company that understands cyber insurance extensively. Any broker or company that does not will be unable to explain what the coverage on your policy entails.
Some important questions to ask:
You should always ask for a full listing of everything that is covered and ask about what is not covered or what is excluded from that listing. A cyber policy can easily be anywhere between 60 to 200 pages of information, and it is crucial for clients to ask the above questions to fully understand their policies.
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