Cyber liability insurance is the fastest growing area of insurance. Cybercrimes and risks show up in different ways all the time, oftentimes overwhelming small business owners and enterprises to know what is covered, who has legal responsibility for risk, or how to best and most cost-effectively cover their intellectual property, customers’ information, and reputation. Comparing cyber liability policies and underwriting risks side by side, there would be almost no wording that is even remotely the same because this type of insurance is so new.
When it comes to picking cyber liability insurance, you have a lot of options. It’s important to know the risks that your industry faces. If you want to cover every possible cyber risk, you’ll be paying an insane amount of money. Here are tips to find the best cyber liability insurance coverage for your business.
In the world of cyber insurance, the phrase “modular” has taken on a whole new meaning. With cyber liability insurance, you may be able to replace some of your coverage modules with new ones that better suit your current needs. Modular policies are becoming increasingly important to help companies understand the scope of their potential liabilities. The risks you have now may not be the same risks you have in 4-5 months, your cyber liability insurance policy should plan for this accordingly.
Risk and claims structure
How is the company structured to handle risks and claims? Do they do it internally, are they a reseller? If your underwriter is internal with your insurance company, they may be able to provide you with more industry insight and build a relationship with you. Either way is good, you just want to make sure the structure of the company works for your business. The internal underwriter could provide a quicker claims payout because there’s a direct relationship between you and the insurer, not you the insurer, and the third party in between.
Does your cyber liability policy cover third-party losses? If a cyber event impacts your business and damages your customers, vendors, or other third-party, you could be held liable. In another sense, does your policy cover cyber events for third parties? Meaning, if one of your suppliers is hacked and loses their data and this results in you having to temporarily stop production, will you still be covered for this loss?
Picking the best cyber liability insurance coverage for your business is indeed a difficult task because different industries face vastly different levels of risk from cyber attacks every day. If you are proactive about setting up the appropriate safeguards for your business, you’re going to be in a better position to protect yourself from cyber-attacks and data breaches down the road. When creating your policy, make sure that you discuss these risks with your broker so that you have adequate coverage.