10 Excellent Tips For Firms Purchasing Cyber Security Insurance Coverage
Companies are very serious about protecting their private data, but the truth is that in most cases they actually miss out on mitigating potential losses and saving costs if they only concentrate on protecting data, while ignoring the pros of buying comprehensive cyber-security insurance coverage (CCSIC). One of the best ways a company can consider in order to protect themselves, but also its customers, is to be aware of the scope of their current insurance policies and buy CCSIC. When it comes to cyber security insurance policies (CSIP) though, it’s a fact that they’re all different ad that is why below we’ve come up with a list of 10 tips that you should consider when renewing or buying a cyber insurance policy.
1.Purchase 1st and 3rd party coverage
When it comes to cyber risk and data breaches, there are usually 2 general categories of potential liabilities and risk: third party and first party risks. First party risks are possible costs for damage to data policyholder’s data or loss of that data or lost business or income caused by a cyber attack or data breach. Some examples of categories of 1st party losses include: (1) loss of use of, loss of or damage to software and data only, regardless if it’s caused by cyber terrorism, cyber war, state actors, former or current employees or contractors; (2) ransomed, stolen, lost or corrupted data resulting from viruses, data breaches or data theft; (3) loss of use of data caused by denial of service attacks, network interruption or software failure; (4) the incapability of doing business due to loss of network access, data or software.
When it comes to third party risks, they include the potential liability of the policyholder to regulatory entities, governmental entities or clients. These risks include claims or lawsuits from 3rd parties that resulted from various cyber events, including data breaches. A firm’s best cyber security policy needs to contain coverage for both types of claims.
2.Protect Data In The Control, Protection Or Care Of Third Parties
When it comes to safeguarding data in the company’s own electronic systems, a lot of businesses will take all the security precautions they can. However, there are actually cases when they need to provide confidential data to third parties, including consultants and vendors. Unfortunately, most insurance companies don’t honor claims that result from the loss or theft of confidential data that the insured passed on to third parties. This includes data in the control, protection or care of third parties. Insurance companies can also minimize their risk by only offering coverage under such circumstances, but only if the sharing of confidential data was authorized by contract. Written contracts prior to accepting projects are usually not required by vendors, so that’s why as a company you need to think about the way coverage may apply in the absence of a written contract.
3.Are Data Transmittals That Take Place Outside The Company’s Offices Protected?
Certain CSIPs include coverage based on the type and number of occurrences that happen in a specific distance from the policyholder’s place of business or in a certain territory. Since there are currently many cloud providers and vendors that host software and data outside the US, but also due to the high number of company delegates that travel in the company’s interest, considering the limitations of cyber insurance security policies is vital prior to getting one.
4.Is Data Stored On Unencrypted Devices Covered By Your Cyber-Security Insurance Policy?
A lot of people these days do a lot of work on laptops or computers in general. A large portion of that work is actually done outside of the office. Technology actually allows people to do the same kind of work they could do in an office in places such as airports, coffee shops, restaurants etc. Even though the majority of laptops provided by the company are properly encrypted, personally owned storage devices and computers are not. If these unencrypted devices are lost or stolen, then the risk of cyber security and data breach claims is very high. Depending on the insurance company and their policies, claims arising from loss or theft of such devices cannot be honored.
5.Regulatory Actions: Does Your Policy Cover Them?
Data breaches not only lead to the disbursement of confidential data and data loss, but they can also subject the company to paying a wide range of fines and penalties imposed by regulators. Federal and state agencies have become very active in the context of cyber security, privacy and data breaches. You need to think about whether the insurance policy your company has offers coverage for a regulatory action or investigation that has resulted from a cyber incident. By getting a comprehensive cyber-security insurance policy, you’re going to be covered for a large variety of regulatory actions by various agencies, including the Consumer Protection Act, the FTC and more.
6.On Top Of The Injuries To Natural Parties, Does The Policy Cover Injuries To The Company’s Corporate Customers?
You need to check whether the cyber security insurance policy your company has actually protects your corporate clients’ data on top of that of natural parties. The number of natural parties is usually higher than that of corporate clients. Because of that, you need to double check your insurance policy and make sure that it also covers injuries to the company’s corporate customers. Review your cyber security policy carefully and see whether coverage includes injuries to partnerships, corporations, companies, but also natural parties.
7.Data Restoration Costs
The majority of CSIPs you can currently buy don’t cover the costs of maintaining, improving, updating, upgrading or replacing a breached computer system. Data restoration costs are generally prohibitive and this is especially true for companies that depend on the access to large amounts of data in order to service their clients or conduct their business. Companies running the risk of data breaches need to double check and see whether their insurer will cover them in full in the event of a major data breach incident.
8.Identity Coverage: Does Your Cyber-Security Insurance Policy Offer It?
In the event your company’s systems are breached and hackers gain access to your client’s personal data, you could be facing very expensive lawsuits. Therefore, make sure that your cyber security policy covers the costs associated with the theft of your customers’ personal information. The policy should also cover the credit monitoring expenses for those whose data was stolen, including identity theft resolution services, credit restoration services, credit counseling services and more.
9.If Payment By Credit Cards Is Accepted By Your Business, You Need To Double Check Whether Your Policy Offers Protection For Payment Card Industry Liabilities
Many businesses these days accept credit card payments for the products and services they sell. However, given the fact that they have vast access to thousands or even millions of credit cards makes them a great target for hackers. As a result, if your company’s systems are breached and hackers gain access to credit card information, then you’ll be liable for the losses. If the cyber insurance policy you have offers Payment Card Industry Liability, then you need to learn more about when and how it would apply.
10.Loss Control Services Should Be Added To Your Policy
When it comes to insurance companies, it’s a given that they want to reduce the number of claims people make. In order to do that, many companies basically sell policies that offer discounted rates, pay back the client for or pay for specific loss control services. What this means is that the insurance company will only pay a certain amount of money in order to have a pre-approved control service company double check the policyholder’s electronic security measures and offer various tips on improving them. As a company, you need to exercise care, since the coverage you buy, including subsequent renewals, aren’t contingent upon the policyholder consenting to make the security updates he was recommended by the loss control services firm.