CYBER INSURANCE
Shaun Kelly, Assured Partners , CALSAGA Preferred Broker
Hope everyone is doing well, and I know all of you are working hard.
Recently, we are receiving more requests for Cyber Insurance coverage than we have in the past. In most cases the requests are a result of a contract requirement, growing concern for data breaches and/or a recommendation from a business legal consultant. In response to any request, we acknowledge that cyber claims should be a concern for all business owners to protect against cyber-attacks, data breaches and fraudulent activity that could potentially cost businesses hundreds of thousands of dollars.
The most common cyber claims are:
- Ransomware attacks which lock up your operational data, shut down your ability to operate and then follows the extortion demand to unlock your data.
- Social Engineering attacks are fraudulent and accidental payment(s) sent directly to the hacker’s bank account. These claims can occur through the disguise of a invoice from a hacker using one of your common suppliers letterhead and changing the bank account and routing numbers.
Cyber coverage is designed to protect you from First Party claims and Third Party claims. Most First Party claims are what is mentioned above (Ransomware and Social Engineering). Third Party claims are bought by clients, vendors, employees… who have suffered a financial loss because of a data breach or cyberattack to your system. All claims are costly; however, Third Party claims can become very expensive, time consuming and may destroy the trust between you and the other party involved in the claim.
If you do have a cyberattack or an unauthorized access , a forensic investigation will be required to determine if any data in your system was breached. Sometimes cyberattacks or unauthorized access can occur with no loss of data. The cost of the forensic investigation is or should be included in the Cyber coverage terms and conditions.
Protecting yourself from cyber claims includes educating your staff on cyber security best practices, implementing Multi-Factor Authentication (MFA is mandatory for most insurance carriers to provide cyber coverage), installing protective firewalls and any other preventative measures recommended by your service provider.
The coverage terms and conditions for Cyber Insurance are extensive and the information I provided is just the tip of the iceberg. You should contact your broker to obtain quotes and detailed coverage information regarding Cyber insurance.
Take care and be safe!
Shaun Kelly joined Tolman & Wiker Insurance Services in 2005. He specializes in all lines of property and casualty insurance for industries including contract security firms, agriculture, construction, oil and gas. Shaun received a BS in Business Administration with a major in Finance from California State University in Fresno, California. He is an active member of several industry associations, including the Association CALSAGA, the Kern County Builders Exchange and the Independent Insurance Agents of Kern County. Shaun can be reached at 661-616-4700 or skelly@tolmanandwiker.com.