What You Need to Consider When Buying Cyber Risk Insurance
With the prevalence of technology and our dependence on it, buying cyber risk insurance is imperative for any business. However, you do need to consider the following points before buying it:
Assess your risks: Before you start the process, assess the risks your organization typically faces. There is no point in paying additional coverage for factors that have no impact on your business. You can get an expert for the evaluation.
Coverage: You can buy comprehensive coverage or get an extension to existing coverage. Alternatively, you can also get multiple insurances. A comprehensive single coverage is usually the better option because it is easier to manage. You also have to keep in mind what the policy will actually cover. For instance, does it cover losses from online fraud, phishing, loss of reputation, event management, court costs and damages from third-party claims?
Third party coverage: Most cyber risk insurances have a first as well as third party coverage. However, you should still clarify this and find out the extent of the coverage towards the third party. First-party coverage will typically include direct expenses like customer business interruption, addressing denial of service, cyber ransom or extortion. Third-party coverage will include claims made by the affected parties like vendors, partners and customers. How will their insurance impact yours?
Exclusions: Every policy will have some exclusion and just as you will experience with any other insurance, make sure you know all the deductibles. This also includes third-party coverage, which will typically have some exceptions. Decide on the kind of exceptions that are acceptable to you and the ones that are necessary.
Coverage time: Most claims and complaints will take time to evaluate and settle. Check the time frame of the cyber risk insurance. Take a call on the duration of the policy keeping in mind the cost.