Cyber Insurance – 6 Things You Need When Applying For Coverage
Cyber breaches keep generating news headlines. The recent Equifax breach is yet another reminder of the complexities of protecting data. In addition to understanding cyber risk and mitigating it, cyber liability insurance is an important tool that organizations can use to protect their bottom line.
A recent Coverage Insights by Zywave notes, “Every insurance policy starts with an application, and cyber liability insurance is no different. While the underwriting process in long-established insurance lines is streamlined, this is not the case for cyber liability insurance. Currently, application forms for cyber insurance are not standard and can be complex—often consisting of dozens of pages.
For businesses attempting to acquire cyber insurance, the application process itself can be daunting. However, proper cyber liability insurance remains a vital risk-transfer tool for organizations of all sizes. To ensure your organization has the right level of insurance when it needs it most, it is critical to prepare for the application process itself.”1
Cyber Insurance – The Key Information You Need
“An underwriter’s job is to assess risk and determine limits and pricing. Insurers depend on the detail contained in an organization’s application, and any vagueness or incorrect information can create issues if and when you file a claim.”2
Some of the most relevant information that insurers will use to determine your organization’s cyber liability risks include:
- “The basics. Insurers will want to know what industry your organization operates in, as well as how much and what types of information your organization stores, processes and transmits. In addition, underwriters will look to see how you manage data security and who is in charge of overseeing cyber-related matters.
- Information security. When it comes to on-site security, underwriters want to know if you have a formal program in place to test and audit security controls. In addition, underwriters typically look to see if you have basic controls in place, including firewall technology, anti-virus software and intrusion detection software.
- Breach history. During the application process, underwriters will take a closer look at your breach history. In general, they want to know if the data you house is particularly vulnerable and how effective your data security techniques are.
- Data backup. Knowing how your organization handles data backup helps insurers better understand your level of data loss risk. Underwriters will want to know if you back up all of your valuable data on a regular basis, if you utilize a redundant network and if you have a disaster recovery plan in place.
- Company policies and procedures. Communication is important when it comes to reducing your organization’s cyber risk. That’s why, during the underwriting process, insurers want to know what types of cyber security and incident response policies you have in place. In addition, it’s likely you will be asked how you handle password updates, the use of personal devices and revoking network access to former employees.
- Compliance with legal and industry standards. Failing to comply with cyber-related legislation can be incredibly costly, and insurers will want to know how you handle compliance. Specifically, they will review whether you are compliant with applicable regulatory frameworks, are a member of any outside security or privacy groups, or utilize out-of-date software and hardware. The more detailed and specific an organization can be during an initial underwriter review, the more likely it is that the organization will receive the proper amount of coverage and good terms.”3
Need Cyber Insurance? Our Canadian Brokers Are Here To Help.
You can take action to protect your business against cyber risks. Talk to us about your cyber insurance needs. Our insurance brokers can help you get a cyber insurance quote that delivers more value and options to your Canadian business.
|ALIGNED Across Canada 100% Canadian owned, ALIGNED is a premiere insurance brokerage that serves more than 1,400 clients across the country. ALIGNED’s offices in Toronto, Calgary and Vancouver are supported by a national operations centre in Cambridge, Ontario. Uniquely within the industry, ALIGNED creates, negotiates and delivers the best business insurance and risk management strategies/solutions to organizations like yours.|
1-3 Adapted from Coverage Insights © 2017 Zywave, Inc. All rights reserved. This Coverage Insights is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel or an insurance professional for appropriate advice.