281-612-5974 info@cglobalins.com

Cyber Attacks Are Getting More Sophisticated

Cyber Insurance is the fastest growing, and the most evolving coverage, in today’s insurance industry.

Cyber breaches and attacks are occurring at a higher frequency, with far reaching financial implications to businesses and individuals.

This frequency of occurrence, and ever-changing manner of hacking and extortion, is forcing carriers to modify policy language in an attempt to keep up with changes, and broaden scope of coverage.

Cyber Liability ThreatsWith the growing awareness in cyber crimes, carriers offering cyber liability are also getting selective in the industries they choose to underwrite.  There is little commonality in policy language and forms between the carriers, with each industry having a different risk profile.  An agent needs to have detailed knowledge of the client’s business to structure a risk management program, and to stay abreast of the industry to know which carriers offer the broadest coverage forms for their client’s operation.

Hackers have smaller businesses in their sights, knowing fully well that they lack the sophistication and budget to have a full-blown IT Department. These companies are far more vulnerable to denial of service attacks, ransomware, malware, and data breach attacks.

Data breaches come in varying forms. They can be in the form of brute force hacking, i.e. barraging a network with password extraction tools, inserting virus and malware in emails, phishing scams, insider rogue employee, and numerous other methods. Cyber policy coverage begins at the time of a data breach.

How your insurance policy with respond to these breaches will be key to your company’s survival.

Language nuances in policies will determine the assessment of liability and how the carrier will respond.

The cyber breach battleground is constantly evolving. This necessitates constant change in cyber risk management programs. Policies are routinely modified to respond to specific scenarios of cyber attacks, and the resulting litigation. Financial institutions and the legal community closely follow these changes, knowing they will be part of a legal challenge.

As an interesting side note, hackers are also taking notes on cyber liability policies. Ransom demands for the WannaCry and Petya ransomwares, which spread in May, 2017 was lower than the deductibles on most Cyber policies. A company mistakenly opting to pay the ransom out of pocket, still leaves itself exposed to the credit notification, loss of business income, regulatory, and PR expenses associated with the breach.

In this evolving field, carriers are recognizing there is no one size fits all insurance policy for cyber coverage. And, unfortunately, businesses and insurance carriers, are restricted to playing defense, waiting for the next cyber attack to take place, and respond accordingly.

For a thorough review of your cyber exposure, call the experts at Commercial Global Insurance Services, a Division of Higginbotham Insurance, at 281-612-5974 or email us at info@cglobalins.com