Over the past few years, insurance carriers have been taking major hits on liability claims due to security breaches because many liability policies have had at least some limited amount of cyber insurance coverage in the past. Some carriers have even paid out claims under business interruption insurance. I saw one claim for nearly $500,000 paid out under a business interruption policy for what amounted to a really bad virus infection.
Things are changing and you need to understand the impact on your business. Here are a few tips:
Many insurance carriers are now making stated exclusions for any cyber related information security breaches.
Information security breaches are now having very strict limits placed on the coverage levels unless you have added a specific rider to include the added coverage.
Cyber liability policies vary greatly between carriers. It’s not like the more common coverages like property and casualty, life or auto. You need to shop around and have a good broker help explain the differences.
Cyber liability coverage comes in many forms; Errors & Omissions (E&O), network security, information security, breach notification, intellection property loss, etc. Make sure you get the coverage you need for the type of data as well as the type of loss.
Many brokers just don’t understand this new and complex cyber insurance market. I understand you may trust and love your current broker. Have them explain the coverages to you and then find someone who specializes in the cyber market and have them review it with you again. You don’t want to have an information security breach just to find out what you thought was covered under your liability insurance isn’t covered at all.