I had an opportunity to attend a good session at the In Business Expo about Cyber Liability. In the event of EQUIFAX episode this was an apt session to start off.
Here’s my takeway
Robust cyber insurance policy can help businesses weather the storm effectively when a data breach or network security failure has occurred.
Risk mitigation is first step for Cyber security
- Policy and governance about usage
- Email and other password policy
- Segregation and access control (Use of VPN etc)
Cyber liability Insurance is an option for Risk Transfer
The Cyber Liability covers the following
- Error and Omission – Third Party
- Media Liability – Third Party
- Network Security – Third/First Party
- Privacy – Third /First Party
Some First-party costs include ( First party risks are direct losses incurred by your organization because of “injury” to electronic data or systems as a result of acts from others)
- Forensic investigation of the breach.
- Legal advice to determine your notification and regulatory obligations.
- Notification costs of communicating the breach.
- Offering credit monitoring to customers as a result.
- Public relations expenses.
- Loss of profits and extra expense during the time that your network is down (business interruption).
Common third-party costs include:(Third party risks include liability for financial losses or costs sustained by others resulting from internet or other electronic activities – essentially, damages for allowing a breach to happen)
- Legal defense.
- Settlements, damages and judgments related to the breach.
- Liability to banks for re-issuing credit cards.
- Cost of responding to regulatory inquiries.
- Regulatory fines and penalties .
This is a relatively new product for insurance and is currently prices based on the revenue of the company rather than security procedures.
According to me underwriting cybersecurity policies is a very good career options for candidates with strong background on network and security.
Small business will benefit a lot from having cyber liability and there are chances the existing policy can be modified to include the cyber security component.
Small Businesses Happy Insuring – Prevention is better than cure ! Find a right partner to navigate through the complexcity of insurance policies !