Cyber Insurance is one of the more tricky subjects for companies to tackle today. It is becoming increasingly common among businesses of all sizes and is even beginning to be looked at as a requirement when partnering with other firms.
What does cyber insurance cover?
This is easily the most common question - and also the most difficult to answer about cyber insurance. Unfortunately, there is no cut and dry answer. It is entirely based on the policy itself, and there are many different ones out there. When selecting cyber insurance make sure to compare different policies and very carefully read what is and isn't covered. One of the most common mistakes we see is a company purchasing cyber insurance without fully understanding what is covered (or what is required of them) and assuming it will just pay for any cyber-related issue they have. In reality there are quite a few questions you should be asking about your coverage, see our guide to some of the basics here.
Will it cover me when I need it?
Many companies are finding out that cyber insurance doesn't cover everything the hard way. There are plenty of companies locked in legal battles with their insurers over payouts for pretty serious sums of money.
- Cottage Health System for $4.1 Billion
- BitPay for $1.8 Billion
- Ameriforge Group Inc. for $480,000
- PF Chang's for $2 Million
How can I avoid these mistakes?
1. Make sure you read and understand your cyber insurance coverage.
2. Be brutally honest on the application for cyber insurance. Pretending you have prevention capabilities or cyber security program elements in place (or not realizing you don't) may mean lower prices for coverage, but it will spell disaster for payouts.
3. Prevention, prevention, prevention. Make sure you get on top of your information security program. Just because you have homeowners insurance doesn't mean you'd leave the door wide open to thieves. Cyber insurance should be treated the same way. Rate your IT to find out where to start.