Essential Cyber Insurance Coverage Areas

 

How often have you approached your insurer for compensation only to be told you are not covered? Insurance has a lot of fine print that people miss. Cyber security insurance is not any different.

 

Fortunately, when you know the essential areas you need coverage for, you can then choose the best cyber insurance policy.

Cyber Liability

Cyber liability is the main block under cyber insurance. You will need to ask the insurer what this covers. Often, it will cater to all the inconveniences that cyber attacks cause.

 

For example, it may cover opportunity costs where the business is forced to forgo a certain program, such as the launch of a new product.

 

This policy may also cover legal fees and settlements arising from lawsuits if the breach resulted in the loss of crucial customer data.

System Restoration

Cyber crimes don’t just affect online systems. Sometimes the malware will compromise hardware systems, such as computers. The restoration process may take time, and it is likely to be costly. You need to get confirmation from the cyber security insurer that all your systems are covered in the policy.

Notification Expenses

When an organization suffers a breach in its system, customers and employees need to be notified. Even if the company is not sure of the extent of the damage, a certified message needs to be sent letting the affected parties know that there was a breach in the system, and their information may have been compromised.

Fraudulent Transfer Losses

If your company suffers financial losses because funds were sent as requested by the attacker, it should be compensated by the insurer. Sometimes, customers lose money because the hacker used the company’s system to request payments from customers.

 

Since the loss is a direct result of the data breach, it should be covered under third-party insurance. These details are not always evident, so you need to be sure of the level of compensation you should expect in case there is a cyber security problem.

Soft Costs

Many companies overlook this expense that is closely associated with cyber crimes because it is not well defined. For example, if the company’s reputation takes a hit because of the breach, who covers the cost of public relations?

 

You may need to hire a PR firm to perform damage control and handle correspondences with distraught customers whose data was illegally accessed. Who handles the costs of using a call center to reach all the affected customers?

 

You may be required to hire credit monitoring services to help monitor the bank accounts and credit cards of affected employees and customers to prevent further fallout arising from the data breach.

 

These are some of the essential areas you need to ensure are covered in cyber insurance policies. Most insurers have these costs and areas covered, but it doesn’t hurt to confirm that should things go wrong, you and your business are protected from any liabilities.

 

A good cyber insurance policy offers hands-on assistance as soon as you report a cyber attack. Cyber insurance is probably one of the few coverages that require insurers to act fast to prevent further damage because the problem doesn’t end with the breach.

 

This is just the beginning because you don’t know what the attackers intend to do with the data. Will it turn into ransomware, or will the attackers use the data to defraud the customers? The ripple effect of cybercrime will linger until the problem is solved.