What is Cyber Insurance?

Cyber security is a top concern for many financial institutions.  Cyber insurance is one tool that should be considered within a holistic cyber security plan.  There are some basic parts to most cyber policies, but what does it all mean?  Terms like 1st party, 3rd party, breach response, e-crime, liability- they can all be confusing in the ever changing cyber landscape.  When considering purchasing a cyber policy, you must consider not only the financial or monetary restitution, but also the services that are provided to your organization in the event of a breach.  Many cyber policies come with resources that are available before, during, or after a breach.  Access to digital forensic experts, attorneys, special call centers, and public relations firms are often just as important as the financial restitution a cyber policy can provide. 

With that being said, let’s discuss the types of coverage a cyber policy may provide. 

The main component to most cyber insurance policies is coverage for lost data.  Whether accidental or malicious, lost data can cause financial loss, reputational harm, and interruption to business operations.  A cyber insurance policy can cover computer and forensic experts to determine if a breach occurred, call center and letter notification services to affected individuals, financial restitution and assistance restoring data, and access to public relations firms to mitigate reputation harm.  Additional coverage items can include extortion payments and expert negotiators, liability and defense costs, and improvements to hardware or systems to prevent a recurrent event. 

Some policies cover e-crime or fraud, for example funds transfer fraud, social engineering, or telephone fraud, however many financial institutions may have this coverage under a bond or another policy they carry.  Cyber insurance is necessary in today’s digital world, and choosing the right coverage with the most broad protection is absolutely essential.

Proctor Advantages

• Access to multiple cyber markets
• Free Security scans through carrier partners
• Customized coverage
• Simple 1-page indication application
• Quick turnaround