Commercial Cyber
Risk Management
Our team of experts is dedicated to providing you with a comprehensive assessment of your risks and quote comparison from our broad network of insurers while ensuring that you have the essential knowledge to make informed decisions on Commercial Cyber insurance.
The Basics of Cyber Insurance
Cyber insurance helps provide financial protection against data breaches and cyber-attacks on your organization. Companies that collect and store credit card numbers, social security numbers, account numbers, financials, health records, and other sensitive customer information must implement viable cyber risk solutions to control and mitigate their cyber risk exposure. Cyber liability coverage can help cover costs associated with a covered cyber loss, such as; lost income, data recovery, hardware repair costs, and lawsuits.
Any company that holds sensitive digital information has the responsibility and obligation to implement a solid cyber security policy. Despite some of the most robust security controls, companies are still at risk from internal and external attacks. The knowledge of a company's vulnerabilities is most accessible to an insider source, so organizations must consider employee and non-employee cyber risks. When purchasing a cyber insurance policy, it is essential to ensure that your policy provides adequate coverage for the specific risks your business faces.
Key Coverage Provisions
Some of the most common types of cyber insurance include coverage for data breaches, cybercrime, and cyber-terrorism. Data breaches can occur when a customer or employee's data is stolen or leaked and can often be very costly to resolve. Cybercrime coverage can help cover the costs of investigating and prosecuting perpetrators and any damages awarded to victims. Cyber-terrorism insurance can help protect against attacks intended to cause widespread damage or disruption and can often be very expensive to repair.
Cyber risk coverage varies by insurer, but policies usually follow these general characteristics:
Risk to Privacy
If your company handles employees' or clients’ sensitive information, your policy should encompass privacy liability coverage. This coverage will protect your assets and help your organization avoid being sued due to compromised data.
Risk to Security
Your cyber insurance policy should cover common cyberattacks, including ransomware, malware, data breaches, and denial-of-service (DOS) attacks. Security risks are always present, no matter how many devices your company uses. It only takes one insecure device to compromise your client's security.
Risk to Service
Cyber insurance can help cover the loss of earnings should your company cease operations/trading due to a cyber incident. It can also help protect you if a client chooses to sue and mitigate the financial impact of defending yourself in court.
Risk to Operations
Operational risk is deeply woven into every organization and internal process. It is the risk of loss due to inadequate internal processes, people, systems, or external events. Your policy should cover everything here, from employees compromising sensitive company information on social media to large-scale external infiltration of private company databases.
There are more specific coverage additions for a cyber insurance policy. These policy endorsements help provide better coverage for more nuanced organizations. Some examples include:
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Social Engineering: Crime insurance policies also offer social engineering coverage, which is usually more extensive than cyber policies. Phishing emails can be a substantial cyber threat issue. Social engineering coverage protects companies from funds transfer fraud, e.g., an employee being tricked into sending funds from company accounts to a cyber-criminal.
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Reputational Damage: Reputational brand damage is the long-term financial impact of a cyber-attack. This is generally limited to a specified amount of time and includes aversion to a brand following a cyber-attack publicized in the media.
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Bricking: Following a malware attack, your company's technology may be destroyed and damaged beyond the point of repair. This would be useful coverage to ensure a new system is up and running to avoid financial losses from unnecessary downtime.
What’s Typically Not Covered?
Cyber insurance can cover a large amount of a company’s cyber risk, but there are limitations, typically including the following:
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A company's value decreases due to the theft of intellectual property
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A future loss of profit due to a security breach
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Any hardware or software upgrades to your system following a cyber attack
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Intentional acts
Policies also typically exclude any business interruption that is not caused by a cyber event. For example, if a power outage causes your website to go offline, your cyber insurance policy would not cover the resulting loss of business income.
Some insurers may offer additional coverage for some of these excluded risks, but it is generally not included in a standard cyber insurance policy. If you are concerned about any of these risks, be sure to discuss them with your CPK Insurance advisor to see if coverages can be arranged.
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