Today’s cyber risks come in all shapes and sizes, from disclosure of protected information due to hacking or employee negligence through network shutdown or impairment, regulatory violations, and everything in between. Consequently, modern enterprises Instead of focusing exclusively on building cyber defenses are taking an enterprise approach to managing cyber risks, which includes development of a cyber security program that places attention on a number of issues, including network security, employee training and third-party risk. Even then, however, some cyber risks will remain.
Instead of simply living with those residual risks, more companies are taking a holistic approach to cyber risk management, which includes transfer of residual cyber risk through insurance.
Cyber Insurance is a contract between the insurer and a company to protect against any losses due to a network-based event. It is designed to protect businesses from the effects of cyber-attacks. It mitigates the risk exposure by covering costs after a cyber-attack or security breach has happened.
In other words, Cyber insurance covers the expenses and legal costs associated with cyber breaches which may involve hacking of systems, data theft, and loss of important information in an organization.
The cyber policy’s First-Party Coverage applies to costs incurred by the insured when responding to a covered cyber event, while Third-Party Coverage responds to claims and demands against the insured arising from a covered incident.
FIRST-PARTY COVERAGE usually can be triggered by a variety of events, including the malicious destruction of data, accidental damage to data, IT system failure, cyber extortion, viruses and malware. The coverages also include legal and forensic services to determine whether a breach occurred and, if so, to assist with regulatory compliance, costs to notify affected employees and/or third parties, network and business interruption costs, damage to digital data, repair of the insured’s reputation, and payment of ransom costs.
THIRD-PARTY COVERAGE can be implicated in a variety of ways, including by claims for breach of privacy, misuse of personal data, defamation/slander, or the transmission of malicious content. Coverage is available for legal defense costs, settlements or damages the insured must pay after a breach, and electronic media liability, including infringement of copyright, domain name and trade names on an Internet site, regulatory fines and penalties.
As with all insurance policies, there are exclusions that are important to understand. Cyber insurance policies generally do not cover:
- Potential future lost profits
- Loss of value due to theft of intellectual property
- Pre-existing or prior breaches or cyber events, such as incidents that occurred before the policy was purchased;
- Cyber events initiated and caused by employees or insiders;
- Infrastructure failures not caused by a purposeful cyber attack;
- Failure to correct a known vulnerability
- The cost to improve technology systems, including security hardening in systems or applications.
Why Choose Us
We, at JKBima are aware that the Increased reliance on computer systems and access to information can significantly increase your vulnerability to cyber security threats capable of devastating an organization’s bottom line. To prevent it from happening, you’ll need comprehensive protection from a broker that specializes in handling cyber risks, offers a full suite of integrated insurance solutions to help minimize gaps in coverage, and understands how to tailor coverage for your business.