You aren’t immune to cyber crime, and we’re not just talking about WannaCry.
You’ve been directly or indirectly damaged by the millions of dollars that consumers lose every year to this menace of the modern world––either in your business, or in your personal life.
It’s not a surprise, then, that cyber insurance is quickly becoming one of the most important business insurance policies. It doesn’t matter if you’re an international supercompany or a local mum-and-dad retailer––we’re all fair game to this new wave of criminals.
But all too often, we see people making big mistakes when taking out cyber security insurance; including spending more than you really need to. Here are just a few of the issues you need to keep in mind when reviewing your policy, and how to ensure you don’t fall into some common traps.
Cyber security insurance is a new product––but that doesn’t mean that there isn’t differentiation in the market. One of the most common mistakes we see is people thinking that their current cyber insurance cover is enough to protect them completely. But as soon as they suffer a breach, they realise just how many different kinds of cyber insurance actually exist––and chances are, they don’t have the one they actually need.
Here are just a few:
All of these protect you from different threats. Cyber insurance is just as diverse as cybercrime, and a policy riddled with exclusions and limits might be enough to give you the illusion of safety, but certainly not the coverage you need for robust protection.
On a similar note, people often don’t realise that cyber insurance can also cover them for third party damages as well. An attack on your business doesn’t just result in a possible breach of your own data, but that of your customers and suppliers too.
An attack on your business doesn’t just result in a possible breach of your own data, but that of your customers and suppliers too.
This can land you in hot water quickly, particularly if you are in an industry where you need to gather and store sensitive personal data such as health records, or even just addresses.
Some cyber insurance packages can cover you in these cases, but as explained above, not all policies are created equally. Moreover, not every business will necessarily need third party cyber insurance on top of their first party cover. Make sure you discuss this option with your advisor and check if your policy will include or exclude third party damages.
Lastly, there’s only one thing worse than not having insurance at all, and that’s thinking you’ve already got the protection you need; protection that crumbles as soon as damages creep into the cyber insurance sphere.
There’s a phenomenon that you’ve probably seen where legislation doesn’t keep up with technology. New threats appear far more readily than new laws are created to reign them in. Insurance can be much the same; we live in a world of constant change, and it can be hard for insurers to keep up. New threats to your business often aren’t covered in traditional policies, which were created for a more simple time when business theft mostly involved invasion of your physical premises. That isn’t the case any more.
New threats to your business often aren’t covered in traditional policies, which were created for a more simple time.
Things like data not being considered a tangible asset if it is stolen, banner ads on your site not being covered by liability policies and professional indemnity not taking into account the effect of online attacks: all of these are holes in traditional policies that cyber security insurance plugs. One of the biggest mistakes, therefore, is assuming that your already-existing policies cover you just like cyber insurance does. Most of the time, they don’t.
“The most common mistake we see here is [business owners] simply don’t have cyber insurance, or think it is covered under other types of liability covers when it’s not,” explains BRAVEday Principal Kane Butler.
“Cyber liability is a policy on its own and although some covers have small extensions or sub limits for certain aspects of cyber, they are nothing like the cover offered on the full cyber liability wording.”
We hope this will help you find the right cyber insurance policy for your needs. Remember: the new world of business is an online one, and ignoring these new threats knocking at your door is a surefire way to find your business in hot water. Get the right advice to protect your investment!
For more information on getting the business insurance you need for your enterprise, check out our free ebook below.