Cyber security is an aspect of insurance that new and growing and with it there is the need to assess liability and the needs of the business. Securing insurance coverage for cyber-attack events should address your cyber liability. Considerations should address monitoring, risk assessment to prevent gaps in coverage, lower deductibles with the use of encryption, phishing attacks, negotiating sub limits for potential claims, coverage for legal representation, and forensic analysis.
One needs to be aware that claim coverages have set sub limits, for instance $250,000 sub limit under a $1 million policy. Looking for a policy feature allowing for adjusting the sublimit will be beneficial. Look for policies that feature reductions in premiums with the implementation of company security and monitoring practices.
A current review of your business’s liability policy should be done to assess gaps. The implementation of riders may be helpful but a comprehensive assessment for vulnerabilities would pay off in the long run. Your current policy or one being considered should have coverage for regulatory compliance and expenses.
Do note that with the rise of cyber events, insurers are being conservative with their coverage. As regulators are paying more attention to cyber events, insurers are revising their products. Businesses should pay close attention when reviewing their internal practices. It is a must along with seeking to leverage best practices as a means to secure lower premiums at a balance for the coverage addressing your company’s potential cyber-attack exposure.
Lorenzo Law Firm, P.A. copyright 2015