As the world becomes accustomed to a sharp increase in major cyberattacks and data breaches, cyber insurance is becoming more popular. Cyberinsurance can protect a business if it is held liable for losses suffered if hackers steal customers’ sensitive data.
You can add value to your conversations with your commercial-lines clients if you discuss with them the importance of this increasingly necessary insurance coverage.
What does cyber liability insurance cover?
Data breach or cyber liability coverage can protect a business from a variety of consequences if it handles or stores any customer data or other sensitive information online. Policies can cover anything ranging from costs related to notifying customers of a data breach, to legal defense costs.
There are two main types of cyberinsurance: first-party coverage, and third-party coverage. First-party coverage is far more common and covers a business’s direct losses in the event of a cyberattack. Third-party coverage covers any losses a business’s customers—or any other third party—might suffer should there be a data breach.
Usually, cyber insurance policies do not cover future lost profits or theft of intellectual property. While the demand for cyber security insurance is increasing at an exponential pace, cyberinsurance premiums also are increasing.
Recent events stress the need for insurance
A recent ransomware attack on a major U.S. dental insurance company potentially could expose the private data of up to nine million patients.
In August of 2020 a data breach at one of the world’s largest eyewear companies exposed the data of nearly 800,000 EyeMed and LensCrafters patients.
A vendor providing service to AT&T customers exposed the personal data of nearly nine million customers of the telecom company.
Cyber security insurance can cover costly ransomware attacks such as these. Losses from cyberattacks are growing each year, having the right cyber security insurance policy has become more critical than ever for businesses that store data online.
Don’t forget your agency may be at risk too
To help independent insurance agents identify their agencies’ cyber security weaknesses, PIA National provides members with access to Winning@Cybersecurity Defense, which helps agents identify different cyber risks, and provides them with specific advice on how to take action to protect their agencies.
Once PIA Northeast member-agencies assess their cyberrisks, they can use PIA-partnered TAG Solutions’ exclusive Cyber Security Program, which will help them to remediate their cyberrisks and cover up their exposures so that their businesses—and their insureds—are protected.
Additionally, PIA has more information on how to protect your agency through its Privacy Compliance Central, and how to comply with DFS cyber regulations (for agents who do business in New York state). If you have questions, PIA Northeast members can call the association at (800) 424-4244 or email the Industry Resource Center.
Scott Finnegan studied Classical Literature at Sarah Lawrence College and English Literature at UMass Boston. He worked as a news producer writing and producing local newscasts.