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Cyber insurance Coverage and Common Exclusions

Businesses conduct numerous transactions through the Internet today due to the exceptional increase in technology and prevalence of social media and marketing online. Unfortunately, these vehicles are also the perfect gateway for cyber-attacks. Whether launched by criminals, amateur hackers, or nation states, cyber-attacks likely to occur and have the potential to cause light, moderate, or severe damage to organizations of any size. Cyber insurance coverage has to do with handling these risks effectively.

What is cyber insurance?

Cyber insurance policies are designed to mitigate risk exposure by offsetting recovery costs after a cyber security breach has occurred. Some of the common reimbursable expenses associated with cyber insurance coverage include:

  • Business losses:May include items covered by an errors and omissions policy in addition to monetary losses from business interruption, network downtime, data loss and recovery, etc.
  • Investigation:These forensic investigations may be done by third-party security firm in coordination with the FBI or other law enforcement agencies.
  • Lawsuits and extortion:Can include legal costs connected with the release of intellectual property and confidential information, regulatory fines, and legal settlements, in addition to cyber extortion.
  • Notification and privacy:This covers required data breach notifications to affected parties, including customers according to the law in various jurisdictions in addition to customer credit monitoring for those who may have had their information breached.

Common cyber policy exclusions

It is important to carefully review your company’s cyber policy. Understanding the policy’s exclusions and taking steps to implement procedures and practices to make sure your company’s operations do not land within these exclusions is important. A cyber insurer may modify the exclusions if they are asked to do so, tailoring certain coverages in cyber policies. It is important to negotiate with an insurance carrier before a cyber-attack and business interruption occurs and a claim is necessary to save your company money and time in the end. Some of the common cyber policy exclusions insurers used to deny coverage include:

  • Bodily Injury and Property Damage
  • Security Standards Exclusions
  • Previous Acts
  • War, Invasion, Terrorism, or Insurrection
  • Laptop Exclusion
  • PCI Assessments and Fines

The above list of exclusions is not given as all-encompassing. Rather, it is beginning point to identify some of the most common cyber coverage exclusions used by insurers. Cyber security professionals and risk managers should make a critical evaluation of the various coverages and exclusions contained within a particular cyber insurance policy to ensure no unnecessary or unintended gaps exist.

By hiring the experienced Alabama and Florida insurance dispute attorneys at Warhurst Law, you can help ensure that you secure the compensation your business needs in the aftermath of a cyber security breach or that of a possible shutdown. To learn about the various recoveries you have access to under the law and to schedule a free consultation, call us today at 251.207.1296 or leave us a message through our contact form. From our office in Mobile, we represent organizations and businesses throughout the Southeast, including Alabama, Florida Panhandle, Louisiana, and across the Gulf Coast.

 

 

 

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