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Assessing Cyber Liability Insurance Options

Cyberattacks are evolving in scale and sophistication, even as businesses increase investments to protect their systems and information. To mitigate growing risk, companies can benefit from the protection that a Cyber Liability Insurance (CLI) policy offers against expenses and liability when vital or confidential information is exposed or stolen.

Given the sensitive and valuable nature of a company’s information, it is not a question of if a business should carry a CLI policy, but of what the right amount of coverage is to fit their needs.

Benefits of CLI

With a CLI policy, a business can be reimbursed for a wide range of costs following a breach, including liability protection, payments to retrieve stolen information in a ransomware attack, investigative expenses, customer notification processes and credit monitoring, loss of business and a host of other possibilities.

The rocketing demand for CLI also has created a growing data set. By working with a trusted insurance advisor, businesses can benefit from in-depth analysis about the coverage held by peer companies, ensuring that their policy aligns with industry benchmarks.

Cyber Liability

Considerations

To determine the level of insurance a business needs or qualifies for, providers will conduct due diligence to assess risk prior to crafting a policy.

Often, these discussions may start with a focus on multi-factor authentication (MFA). By requiring a combination of steps to access a network that could include a password, PIN, code sent to a user’s device, token or biometric login, MFA can thwart the overwhelming majority of cyberattacks on user accounts. Without MFA protocols in place, a business of any size may find it very difficult or impossible to carry a CLI policy due to the potential for exposure.

During due diligence, a business also can expect to have reviewed, among other areas, its:

  • Transaction controls. What does the business require for money transfers? Who has access to money, and what levels of authentication are required before money is transferred?
  • Network security controls and internal cybersecurity practices. Insurers need to understand the company’s network structure and management strategies, whether handled internally or by a third-party vendor. Additionally, certain protocols such as MFA are nearly universally required for a business to be able to carry CLI.
  • Previous cyber incidents. Has a company encountered previous cyberattacks or issues, and to what extent? Does a company have past cyber incident claims?
  • Vendor management and third-party network access. Any person or external business entity that has access to a network can pose a cyberthreat, either directly or indirectly. Diligent vendor management and network access procedures are critical factors in mitigating risk.

Providers analyze these factors to quantify risk and determine the amount and type of coverage that a business may qualify for with a CLI policy. This process also helps businesses review cybersecurity protocols, examine potential threats to strengthen their overall security strategy and understand their total risk management picture.

The advisors at First National Insurance Agency (FNIA) possess the depth of industry knowledge to build a CLI plan that fits your needs.

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