The Ultimate Cyber Insurance Checklist

Data breaches have peaked at a 17-year high, averaging more than $4.2 million.

With cyber threats posing serious threats to an organization’s data security, there’s good reason why many organizations are reevaluating their infrastructure security and cyber insurance coverage.

Apart from security, the main reason is because even if a business does have cyber insurance, if they don’t follow the guidelines to a T they will NOT get a payout. This is why it is absolutely essential to ensure your organization meets every insurance need so coverage can be ensured.

Considering how 52% of businesses don’t have cyber security insurance and how 40% business owners spend $100,000 to resolve a cyber attack, the stakes only grow higher the longer one remains uninsured.

Considering these facts, the objective of our blog is simple. To help you create a comprehensive cyber insurance coverage checklist. With this in mind, let’s begin.

Checklist & Requirements for Cyber Insurance Coverage

Organizations striving to ensure that all their bases are covered need to remain agile.

With ransomware and phishing attacks on the rise (and two the leading causes of data breaches), there are many attack vectors that a business must fortify itself. Failure to do so may result in exploitation by cybercriminals – or worse, a breach.

Considering the risks of not being insured, businesses would do well to consider the following:

Cyber Insurance Coverage Checklist

Step 1: Assess Your Risk

Many businesses have been forced to step-up their data accountability following the strenuous overhaul in data regulatory and compliance. For most businesses, being compliant is no longer enough. To determine if you need cyber liability insurance, see if the following apply:

• You handle sensitive data or information (for example, ePHI)
• You use a third-party vendor (like a cloud provider, MSP, etc)
• You allow employees devices to access, connect, and store confidential information

Step 2: Determine Your Coverage Requirements

Avoiding gaps in your coverage is not easy – especially with so many bases to cover.

To better understand your cyber insurance coverage needs, consider the following:

Step 3: Determine if You Need First and/or Third-Party Coverage

Now that we’re a little more than half way through our cyber insurance coverage checklist, it’s important to consider the following insurance coverages. Common coverages include:

• Data Coverage – For costs incurred with recovering lost and stolen data; for costs involved with a cyber attack (or internal issue) resulting in a data breach.
• First Party Coverage – For costs of damages done to your company.
• Cyber Extortion Coverage – Protect your business against a security breach by covering hacker ransom demands and related costs (like hiring a negotiation expert).
• Privacy Liability Coverage – Covers the costs of defending your business against lawsuits, in addition to your inability to protect data.
• Network Security Coverage – Provides financial protection against lawsuits due losing client/user data or losing the ability to access your system due to a virus, denial of service attack, malware, etc.
• Notification Costs Coverage – Cover the notification costs of letting your regulator(s) know that your data has been impacted by a data breach.
• Third Party Liability Coverage – This form of cyber incident insurance provides financial coverage for the costs of defending your business from external threats or for damages incurred by an attack.
• Regulatory Compliance Coverage – Covers the costs of alerting authorities to breaches and events for GDPR, NYDFS, HIPAA, and other regulatory agencies.
• Business Revenue Loss Coverage – Ensures coverage for costs involved with ending or minimizing downtime, in addition to business income losses incurred as a result.
• Marketing & Public Relations Coverage – Covers the costs of rebuilding and protecting your company’s reputation following a breach.

Step 4: Work Within Your Budget

Your organization’s size, structure, industry, needs, and demographics influence your coverage needs. Due to these reasons, it’s challenging for most businesses to find adequate coverage (while minimizing coverage loopholes).

One way businesses avoid this scenario is by consulting with a managed IT service provider.

Step 5: Mitigate Risk

Reducing your organization’s risk requires comprehensive vetting on your behalf.

To avoid risk of delayed processing or cyber attack claim denials, take into the account these top three exemptions often used by insurers:

• Pre-Breach Lawsuits – Data misuse is leverageable prior to actual induced damages, as seen in the Kimpton Hotel’s cyber breach lawsuit.
• Negligence Exclusion – When an insured entity fails to maintain the minimum security standards, they forego their precluded coverage.
• Social Engineering Schemes – Phishing attacks are one of the leading causes of data breaches, accounting for 17% of data breaches. Without adequate cyber security awareness training and coverage, your business is likely at risk.

Pro Tip: To avoid lapses in coverage, always review your insurer’s document requirements and ensure you remain in compliance at all times.

Reduce Risk With Our Cyber Insurance Coverage Checklist

Your business deserves more than becoming another statistic to a data breach.

And while no risk management plan is capable of being fool-proof, at least with cyber insurance coverage you can take steps to protect your business. Without, you’re doing your business a considerable disservice by positioning your business at the bottom of an uphill battle.

Don’t elevate your cyber risk but unnecessarily risk your customer information, personal information, and computer systems to cyber attacks.

Take time with us to shore up your digital defenses, improve your incident response, and lower your cyber risk profile by contacting us today.