Cyber Insurance

Uptake of Cyber Insurance Continues

We see the headlines month after month: costs from data breaches and cyber attacks run to the tens or hundreds of millions for large, public companies. But that’s only part of the story. Every day, organizations ranging from small municipal governments to huge pharmaceutical companies — from your dentist’s office to your regional supermarket chain — deal with cyber attacks. Most aren’t widely reported. Quietly, ransoms are paid, breaches are remediated, and fines are levied, with the targeted organizations taking the brunt of the financial hit. With these costs presenting a significant (and too often, existential) threat to organizations, it’s no surprise that the uptake of Cyber Insurance continues to grow at double-digit percentages year over year

Common Incidents That Trigger Claims
  • Ransomware attacks – hackers lock up files or devices and demand a ransom payment in exchange for release.
  • Data breaches – confidential data is stolen or otherwise exposed.
  • Wire fraud – an employee is tricked into sending money to a scammer.
  • System failure – shutdowns due to system outages that may or may not be malicious in nature.

 

Cyber insurance policies generally fit into two main categories: first-party coverage and third-party coverage. It’s crucial to differentiate between the two and remember that cyber insurance offerings can vary among different providers.

First-Party Coverage

First-party cyber insurance can provide financial protection for any losses that a company suffers due to a cyber incident. Coverage losses generally include the following:

  • Legal Expenses
  • Costs Related to Incident Response
  • Data Recovery Costs
  • Losses From Business Obstruction
  • Damage to Reputation
  • Losses Due to Cyber Extortion

Third-Party Coverage

Third-party cyber insurance can provide financial protection for claims made, fines incurred, or legal action taken. Types of coverage usually include the following:

  • Media Liability
  • Data Privacy Liability
  • Defense Against Regulatory Actions

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