Cyber security insurance is a new concept that can be difficult to navigate when purchasing your first policy. For example, you’ll almost certainly need to define a cyber-attack and assess the costs associated with non-monetary expenses (such as damage to your company’s reputation).
Furthermore, insurers are still figuring out how to underwrite these policies. We have compiled a list of five critical tips for purchasing the right cyber insurance policy to help alleviate some of those concerns.
- Evaluate your cyber risk:
When looking to purchase a cyber insurance policy, the first thing you should do is assess your cyber risk. It is critical to identify your actual risks because this can determine the type of cyber insurance coverage you require.
Do you have any personally identifiable information (PII), payment card information, or other sensitive data in the cloud, for example? Is it only sales figures or different types of data? Do you frequently make wire transfers? These are critical questions to answer to assess your cyber risk and determine which plan is ideal for you.
- Carefully read the policy terms:
Another critical step is thoroughly reading the proposed policy’s terms before signing on the dotted line. For example, what constitutes a “security event” may differ from policy to policy. Reading about it may also help you determine whether the policy is appropriate for the level of risk in your organisation.
- Confirm that it is an ideal fit:
Cyber insurance can only help you if it is an ideal fit for your company. Take the time to learn what a policy covers and whether it applies to your business. Contingent business and interruption coverage are two ideal options available in cyber insurance policies (and are helpful for almost any organisation).
The contingent business interruption coverage protects you from financial losses if a specific type of business partner suffers a defined cyber incident and cannot provide a service to your company.
- Be aware of everything that comes with your policy:
Did you know that cyber insurance policy frequently includes a panel of professionals, such as attorneys and forensic consultants, who can assist you if an incident occurs? These experts have extensive cyber experience and can advise you on regulatory issues, legal considerations, and privacy concerns.
Access to this team of people can be highly beneficial, especially for small and midsize businesses frequently left wondering what to do and what resources to gather when a cyber incident occurs. Are you protected if a high-risk employee is socially engineered?
- Be aware of your responsibilities:
Finally, you must understand your responsibilities under the policy. For example, who must be notified if a security breach occurs? What if a hacker has been infiltrating your systems for years, but you only recently discovered it? This is when a retroactive cyber insurance policy would be helpful. Understanding precisely what you must do in the event of an incident can mean the difference between being covered by the insurer and not being covered.
Incorporate your policy’s requirements for providing claim notice and obtaining insurer consent before responding to an incident into your organisation’s overall incident response plan. Also, assemble a team of cyber-savvy individuals to assist you in filling out the initial. Considering all these factors, you should have a much easier time purchasing and protecting the right cyber security insurance plan for your company.
Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.
