Cyber Insurance: A Digital Necessity

All businesses, large or small operate digitally in one form or another. They need to protect themselves against their cybersecurity risk.

The costs of a breach can be enormous. (Imagine losing a major bank transfer or assuming a loss of $10,000 for each cyber-security infraction.) By the way, your attacker can come from the outside or inside, as 70 percent of breaches are initiated by employees or former employees.

So what this thing called cyber insurance? Cyber insurance arose out of the traditional Errors and Omissions (E&O) coverage known to most businesses. Over time coverage was extended to viruses, data corruption to connected client systems, or damage affecting customers. Generally, early adopters were technology-based companies.

More than a decade ago, network security policies expanded to include breaches of confidential information. At that point, the retail segment adopted cyber insurance on a wide scale.

Coverage for any business could be simple or complex. The determining factor is an employer’s decision on degree of acceptable risk. Let’s take the simple first.

The Bank of Tucson, through Grandpoint Insurance Services, now offers cyber insurance coverage for its customers at a nominal cost. The coverage for business accounts protects against losses for funds transfer fraud (when someone impersonates your company for a funds transfer) and cyber deception (when a criminal pretends to be your vendor employee or client and gets you to transfer money to them). Mike Hannley, president of Bank of Tucson, announced the new product in the last month. Mike commented, “Internet criminals do not use guns for illicit gain, but they gladly use your computer and network for paydays!”

Let’s take a look at broader, more complex cyber insurance. That kind of cyber insurance may have several parts:

  • Network Security: Your network has failed in some form. It could be that someone is trying to shut down your network to in an effort to stop you from conducting business. Or, you’ve just experienced a data breach, some form of extortion, or tapped your system to advance a virus to all of your connected transmissions.
  • Privacy: Privacy is huge and does not necessarily have to be connected to a system failure. There are many known cases of information of physical records that are not properly disposed of, including human errors (think of a lost laptop with an easily penetrated passcode) or a hard drive with customer records that somehow got into the wrong hands.
  • Media Liability:  This aspect covers advertising injury claims like copyright, libel and slander. Coverage may extend to offline content as well.

Digging deeper, network security and privacy liability policies covers first and third party liabilities. First party means the direct costs of responding to a breach; third party means it applies when people sue or make claims against you.

First party inclusions:

  • Costs of notifying anyone attached to the breach
  • Loss of profits and business interruption
  • Legal advice and regulatory obligations
  • Public relations expenses
  • Third party inclusions:
  • Regulatory fines and penalties
  • Damage and judgments related to the breach
  • Legal expenses
  • Costs of responding to regulatory inquiries

According to Jack Clements, CPA at the Clements Agency, “Every company, large or small, should at least consider cyber Insurance. There are so many examples of exposure to loss that it is difficult to list them all; some exposures are unique to certain types of businesses.”

“And don’t forget about controls; they are critical,” Jack continued. “In broad policies, premiums are based upon the quality of your controls. Many companies believe that their controls are so strong, that it can never happen to them. Believe me, it can and it will.”
 
Another aspect of this discussion is commonly known as “Social Engineering” or “Duping.” This is a scheme where a seemingly legitimate email is sent to you asking for money or confidential information. It happens all the time. Jack added, “In fact, an attempt was made on our office this week. We received a business email from my brother, with whom we do business, asking for a wire transfer. When we called him, we learned that it was completely fraudulent. Had we complied, the transaction would not have been covered by our Cyber Policy, since we willingly sent the money. We would, however, have been covered by the Social Engineering endorsement that we have on our package policy. Just another area to think about.”

Insidetucsonbuimess: http://bit.ly/2aeacm4

 

« Too Much Information: Making Sense Of Big Data
Solutions To Automotive Cyber Hacking Risks »

CyberSecurity Jobsite
Perimeter 81

Directory of Suppliers

Authentic8

Authentic8

Authentic8 transforms how organizations secure and control the use of the web with Silo, its patented cloud browser.

LockLizard

LockLizard

Locklizard provides PDF DRM software that protects PDF documents from unauthorized access and misuse. Share and sell documents securely - prevent document leakage, sharing and piracy.

The PC Support Group

The PC Support Group

A partnership with The PC Support Group delivers improved productivity, reduced costs and protects your business through exceptional IT, telecoms and cybersecurity services.

Perimeter 81 / How to Select the Right ZTNA Solution

Perimeter 81 / How to Select the Right ZTNA Solution

Gartner insights into How to Select the Right ZTNA offering. Download this FREE report for a limited time only.

ZenGRC

ZenGRC

ZenGRC - the first, easy-to-use, enterprise-grade information security solution for compliance and risk management - offers businesses efficient control tracking, testing, and enforcement.

Cyber Security Capital (CS^)

Cyber Security Capital (CS^)

Cyber Security Capital is a consultancy helping to mobilise and empower individuals, corporate leaders and entrepreneurs in cyber security.

TEISS

TEISS

Teiss.co.uk is a website dedicated to providing information about cyber security. TEISS also provide a series of conferences and events focused on cyber security.

The Open Group

The Open Group

The Open Group: Leading the development of open, vendor-neutral IT standards and certifications.

Arab Information & Communication Technologies Organization (AICTO)

Arab Information & Communication Technologies Organization (AICTO)

The Arab ICT Organization (AICTO) is an Arab governmental organization working under the aegis of the league of Arab States.

Aiuken Cybersecurity

Aiuken Cybersecurity

Aiuken is an international IT Security company, focused on communications and IT technologies, specialised in Security and Cloud Services solutions with high added value.

Blaze Information Security

Blaze Information Security

Blaze Information Security is a privately held, independent information security firm born from years of combined experience and international presence.

Octane OC

Octane OC

OCTANe is building the SoCal of tomorrow. We drive innovation and growth by connecting people, resources and capital. Our Incubator focus is FinTech, Data Analytics and Cybersecurity.

Nemko

Nemko

Nemko offers testing, inspection, and certification services worldwide, mainly concerning products and systems, but also for machinery, installations, and personnel.

DeepSeas

DeepSeas

DeepSeas is the result of a merger between Security On-Demand (SOD) and the commercial Managed Threat Services (MTS) business of Booz Allen Hamilton.

Sovrin Foundation

Sovrin Foundation

The Sovrin Foundation is a private-sector, international non-profit that was established to govern the world's first self-sovereign identity (SSI) network.

Qascom

Qascom

Qascom is an engineering company offering security solutions in satellite navigation and space cybersecurity. We are one of the European key players in GNSS authentication and security.

NVISIONx

NVISIONx

NVISIONx data risk governance platform enables companies to gain control of their enterprise data to reduce data risks, compliance scopes and storage costs.

Toka Group

Toka Group

Toka empowers government agencies with critical and previously out-of-reach digital forensics, force protection and Intelligence capabilities, tackling the fields' most pressing challenges.

International Association of Financial Crimes Investigators (IAFCI)

International Association of Financial Crimes Investigators (IAFCI)

International Association of Financial Crimes Investigators provides services and information about financial fraud, fraud investigation and fraud prevention.

Information Systems Security Association (ISSA)

Information Systems Security Association (ISSA)

ISSA is the community of choice for international cybersecurity professionals dedicated to advancing individual growth, managing technology risk and protecting critical information and infrastructure.

Kong

Kong

Kong - powering the API world. Increase developer productivity, security, and performance at scale with the unified platform for API management, service mesh, and ingress controller.