Understanding Cyber Insurance Risk Transfer Alternatives
Explore the world of cyber risk and insurance, uncovering the value proposition, available coverage options, underwriting topics, and essential insights into cyber risk and cyber insurance. Learn about the increasing cybersecurity incidents, types of coverage offered by insurance companies, and different alternatives available for transferring cyber risks. Discover how insurance products can mitigate financial losses from data breaches, regulatory fines, business disruptions, and more.
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Cyber Insurance Risk Transfer Alternatives Heather Soronen - Operations Director Rocky Mountain Insurance Information Association
Agenda Cyber Risk Value Proposition What is Available Underwriting Topics What You Need to Know
Cyber Risk & Cyber Insurance Cyber Risk any risks that emanate from the use of electronic data and its transmission, including technology tools such as the internet and telecommunications networks. It also encompasses physical damage that can be caused by cyber attacks, fraud committed by misuse of data, any liability arising from data storage, and the availability, integrity and confidentiality of electronic information be it related to individuals, companies, or governments. 1 1 CRO Forum, Cyber Resilience Paper at 5 (December 2014) 2016 Cyber Insurance Buying Guide. Financial Services Sector Coordinating Council for Critical infrastructure Protection and Homeland Security
Almost 43 million cybersecurity incidents detected in 2014 40% increase over 2013. 2 2015 increased another 38%. 3 Included: Disruption of Business Erosion of Customers Forensic Investigation Regulatory Fines Brand and Reputational Damage Loss of Intellectual Property Exposure of Sensitive or Confidential Personal and Business Information - Legal Penalties - Loss of Revenue - Customer Notification - Attorney Fees 2 3 2016 Cyber Insurance Buying Guide. Financial Services Sector Coordinating Council for Critical infrastructure Protection and Homeland Security PwC, Managing Cyber Risk In an Interconnected World: Key FInding from The Global State of Information Security Survey 2015 at 7 (Sept 30, 2014) PwC, Turnaround and Transformation in cybersecurity: Key FInding from The Global State of Information Security Survey 2016 at 2 (September 2015)
Insurance has responded with a variety of products. Main Types of Coverage: Data Privacy Liability Coverage for Loss or Breach of Data Remediation Cost Coverage Customer Notification Forensic Investigation Regulatory Fines and other Penalties 2016 Cyber Insurance Buying Guide. Financial Services Sector Coordinating Council for Critical infrastructure Protection and Homeland Security
Other Types of Coverage Costs and Liability Arising out of Cybersecurity Incidents NOT involving Data Breaches Business and Contingent Business Interruption Cyber Extortion Media Liability Brokers can help find appropriate coverages. Create towers of insurance and adding excess layers. 4 DO NOT expect your traditional property or liability policy to cover Cyber Losses! 4 Willis Re, Marketplace Realities 2015: Spring Update (April 2015) 2016 Cyber Insurance Buying Guide. Financial Services Sector Coordinating Council for Critical infrastructure Protection and Homeland Security
Holistic Response Risk Mitigation Response / Recovery Risk Transfer Many organizations lack awareness about cyber insurance Why? 2016 Cyber Insurance Buying Guide. Financial Services Sector Coordinating Council for Critical infrastructure Protection and Homeland Security
Reasons to Consider Cyber Insurance Value on cyber risk Underwriting process can help identify gaps and improvement opportunities Inclusion of risk mitigation tools & incident response. 2016 Cyber Insurance Buying Guide. Financial Services Sector Coordinating Council for Critical infrastructure Protection and Homeland Security
How to Begin? Evaluate potential risk exposure What information is used? What are the ramifications if the information is compromised? What steps have already been taken? How much insurance? What is your risk appetite? What type of insurance? 2016 Cyber Insurance Buying Guide. Financial Services Sector Coordinating Council for Critical infrastructure Protection and Homeland Security
First Party Coverage - Crisis Management & Identity Theft Response - Cyber Extortion - Data Asset Protection Third Party Coverage Network Security Liability Privacy Liability Most CGL Policies will NOT cover losses as a result of Data Breach. 2016 Cyber Insurance Buying Guide. Financial Services Sector Coordinating Council for Critical infrastructure Protection and Homeland Security
The Underwriting Process a.k.a. Get Your House in Order Dedicated Information Security Resources Information Security Policies and Procedures Employee Education Incident Response Planning Security Measures Vendor Management Board Oversight *Tip Ask the underwriters for a list of questions prior to the discussion... 2016 Cyber Insurance Buying Guide. Financial Services Sector Coordinating Council for Critical infrastructure Protection and Homeland Security
What to be Aware of When Shopping Policy Construction Insuring Agreement When is coverage triggered? When is notice to the insurers required? How are breach counsel and vendors selected? 2016 Cyber Insurance Buying Guide. Financial Services Sector Coordinating Council for Critical infrastructure Protection and Homeland Security
What to be Aware of When Shopping Key Exclusions / Sublimits Portable electronic device exclusion Intentional Acts Exclusion Nation / State, Terrorism, Cyber Terrorism Exclusions / Acts of God Negligent Computer Security Exclusion Sublimits Post-Breach Services Vicarious Liability / Vendors Other Policy Considerations 2016 Cyber Insurance Buying Guide. Financial Services Sector Coordinating Council for Critical infrastructure Protection and Homeland Security
