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Cyber Insurance

Homeowner’s Coverage Impacted by Cyber Concerns

Homeowner’s Coverage Impacted by Cyber Concerns

There has been a lot of stories in the news lately about digital security and data privacy. When it comes to the security of our digital information, there is a lot at stake. Protecting your identity, financial information, and personal data from theft is incredibly important and can save you from troubles down the road.

Unfortunately, the instances of cybercrime are on the rise. In 2015, nearly $15 billion was lost because and cybercrime. This kind of digital crime has become more popular than property crime in the United States.

Cybercrime’s impacts

Cybercrime has an incredible reach due to the number of technological devices we have at our fingertips. From our phones to computers, tablets to in-car digital systems, we add more and more personal information to our devices every day. These devices then become gold mines for people who want to steal your identity, financial information, and much more.

In addition to hacking into your personal information, cyber criminals can use your identity to send back transfers, extort people for money, and damage your reputation without your knowledge. Right now, this sort of damage is hard to protect against if you aren’t prepared for it.

Cybercrime can have far-reaching impacts. A hacker may not gain much financially, but it causes you a lot of trouble to replace credit cards, make sure your social security number isn’t being used by someone else, and change all your online passwords.

Keep Yourself Safe

There are different ways that you can keep yourself safe online. Make sure to change your passwords regularly and make them strong; a random string of letters, numbers, and symbols is hard to remember, but even harder to hack. If you do need to write your passwords down, make sure they are in a location where only you can access them.

Use encryption data to protect your email and documents you may be storing in the cloud or in another online server. These online locations aren’t immune to breaches, so make sure you have an offline backup of all your important information.

As tempting as it is, limit the personal information you share on social media. Don’t add people you don’t know to sites like Facebook. Remember that a person who hacks into just one of your social accounts can grab enough information to infiltrate further and discover more about you. This can include your location, where you work, your birthday, or your social security number.

Cybercrime and homeowner’s insurance

Homeowner’s insurance hasn’t typically offered protections against most kinds of digital theft that could happen to you. Homeowner’s insurance has offered people a safety net in case they have their identity stolen. In traditional cases, this means refunding fraudulent charges and replacing things like credit cards that may have been compromised.

Cybercrime has added a new level to identity theft. If someone gets your data and pretends to be you online, your reputation could be damaged in addition to your information being spread online. Hackers have gotten around traditional homeowner’s insurance policies because of the nature of their cybercrime.

However, the homeowner’s insurance industry is changing to meet these new needs. A new cyber family policy may begin to be added to some homeowner’s insurance policies to protect your digital assets as well as other aspects of your online life.

One insurance policy can’t keep cybercrime from happening, but it can help you if your digital information should be breached in any way. Even if your reputation is being damaged online, a cyber insurance policy associated with your homeowner’s insurance could help you discover what information has been leaked, where it has gone, and what you can do to prevent it from happening again.

Time will tell how other parts of the insurance industry adjust to the increase in cybercrime.


THE SKYLINE DIFFERENCE

Other brokerages take a cookie cutter approach to insurance and outfit their customers with generic coverage.  Skyline is different.  We believe insurance should be built on innovation and experience. We appreciate the fact that every engagement is unique and understand proper coverage requires a deep understanding of the underlying business and individual.

"The opportunity to safeguard your concerns is a privilege we never take for granted."
 
 
 

Cyber Insurance Risks and Solutions – 2017

Cyber Insurance Risks and Solutions – 2017

Cyber insurance is here to stay. For independent agencies still reluctant to embrace cyber offerings, there's not much choice left. The product reaches into nearly every sector of the economy and is fast becoming a viable commercial insurance product.

In 2015, nearly $1 billion in cyber insurance premiums was reported to regulators. On top of that, global estimates top out at nearly $3 billion in premiums per year. Most experts agree coverage will continue to grow.

Lloyd's of London found that over 92% of businesses in the European Union had experienced a data breach within the last five years. The demand for cyber coverage is here to stay.


What is Cyber Insurance?

Cyber insurance is simply a policy created to protect a business's liability if a data breach were to occur. Common forms of cyber attacks include stealing credit card or social security numbers. 

There are a number of different types of cyber insurance, which are often available separately under a single policy. These include:

  • Security Events Cost: This coverage refers to the cost of hiring a breach coach to advise on regulatory requirements when notifying people about a breach that affected them.
  • Business Interruption: This coverage protects a business from a non-physical loss due to a cyber attack. The attack can occur at an insured site or a dependent location.
  • Loss of Digital Assets: This coverage ensures recovering and recreating data that has been lost or destroyed is covered.
  • Cyber Means: If a theft was perpetrated in a cyber manner than this coverage protects your business from it. Examples could be schemes where thieves impersonate email styles to trick staff into providing data or transferring funds.
  • Liability for Losses: Coverage for individuals who suffered medical, financial and other hardships due to personal information being stolen.
  • Electronic Media Liability: This coverage ensures a company will be protected from personal injury from intellectual property rights claims by producers of content.
  • Regulatory Coverage: Helps cover the costs for fines, penalties, and investigations in the event of a cyber security event.

Understanding Limits and Sub-Limits

As cyber insurance coverage is continually changing, it can be difficult to keep up with everything. Even some great brokers struggle to keep up with all the changes in the marketplace.

Due to the various types of cyber insurance coverage, the complexities stem from the structural differences in policies. Many insured are startled to find out the relationship between sub-limits and limits within their policies.

One important focus for cyber policies is whether a policy requires insured to pay a claimant before being reimbursed or if the policy pays on the insured behalf. This can change depending on the type of coverage within the same policy.


Continual Competition

Cyber insurance is becoming increasingly competitive. Most in the industry view cyber policies as a new growth segment, especially for certain specialty markets. Due to the competitive nature of said coverage, pricing tends to be sticking points for decision makers.

Brokers and agents must focus on the quality of cyber coverage and service – over price. Cyber policies are purchased for their ability to help a company respond to a cyber crisis.

As such, finding a cyber vendor who offers high quality consultants and breach vendors can be paramount. Legal staff, forensic services, network security, and more should be considered, too. 


Cyber in the Future

Cyber insurance is here to stay. The growth is there, along with the need. As such, underwriters are beginning to make moves towards standardization. With language standardized, a simplification of the complicated application process could be forthcoming.

While the need is there, many companies still do not see cyber coverage as mandatory. If more companies begin to make cyber protection a priority, then this market could explode in the coming years. 

For more information about cyber insurance contact Skyline Risk Management, Inc. at (718) 267-6600. 

European Businesses Continually Under Attacks From Cyber Criminals

European Businesses Continually Under Attacks From Cyber Criminals

Companies in the United States have dealt seriously with cyber security for almost a decade now. The CEOs of most enterprises in the country understand the issues a cyber breach can bring.

Companies like Target and Sony have suffered greatly due to cyber attacks, and the boards of directors for many U. S. -based businesses have decided that cyber security is a huge issue worth investing in.

European businesses are a bit behind the times when cyber security is the topic at hand. That is all about to change. The European Union is about to introduce strict regulations.


The General Data Protection Regulation

Starting in 2018, the General Data Protection Regulation will create stringent requirements for all companies doing businesses in Europe. If a company handles European consumers' data, they will be required to comply with the regulations – no matter where the company is based.

To better understand how European companies deal with cyber security, Lloyd's commissioned a survey. The survey found that only 54% of CEOs in Europe take responsibility for cyber security. Many do not take the risk and impact of a major cyber attack seriously.


A Real Risk Right Now

While European CEOs do not take cyber security as seriously as their U.S.-based counterparts, they may need to. The Lloyd's survey found that 92% of businesses in the region had suffered a data breach within the last five years. That is a staggering number.

Despite evidence to the contrary, only 42% of European CEOs believe a future breach to be worrisome. Most companies were more focused on the threat of an external attack or a hack. The risk of internal attacks was not a concern for most firms.

When questioned about the motives of a potential hack, companies were concerned with the probability that a hacker would attack for financial gain. Political reasons and hacking by a competitor were also cited as primary concerns.

While European companies are beginning to focus on cyber security, there is a real risk right now. If the companies do not start to focus on these risks immediately, their complacency will cost them greatly in the future. The implications of a cyber attack could be vast.


Understanding Cyber Insurance

While big businesses in the United States typically have some form of cyber insurance, business leaders in Europe are generally unaware of the need. Over 73% of CEOs in Europe had a limited understanding of cyber insurance, according to the survey from Lloyd's. Another 50% did not realize that insurance for data breaches is available.

As the conversation about cyber security continues in Europe, many companies will be forced to pay attention to the new EU regulations and how to protect their consumer data properly.

Typically, this focus will result in added cyber security measures and some type of cyber insurance coverage. Cyber insurance is more than coverage for lost income. The coverage includes customer protections and a focus on preserving a company's reputation. 

Insuring Against the Cyber World

Insuring Against the Cyber World

In the age of social media, live streaming, the cloud, and smart phones, the internet has become a hot spot for crime. As seen in the movie Hackers, those with a certain skill set can choose to use those skills either for good or for evil. Those using them for evil are finding new and innovative ways to hack into your business systems, your personal smart phones, and even your web-based home security systems. However, those using their skills for good are helping businesses and everyday citizens stop these hackers from the onset, keeping personal data safe and secure. As this industry need to protect your data at every turn rises, the need to have insurance in the event of a problem also rises, making cyber security insurance the newest wave of income for property and casualty insurance suppliers.


The Landscape

Liability coverage for cyber security is a growing area for many insurance providers. As of today, over fifty insurers are carrying lines that protect your cyber risk. However, there is little known, as of yet, about this field of liability and how the courts will react to lawsuits brought about as a result of a hack and loss of data or monies from the victims. Even more important, cyber issues are changing daily. Just as technology, in general, changes faster than most people can keep up with, cyber issues change just as rapidly. The hacks are becoming more and more complex and the losses are becoming steeper. New laws are enacted regularly to attempt to mitigate the issues and the losses, however, when dealing with the internet, US regulations do not necessarily have any effect on our ability to catch or prevent perpetrators from places like Russia and Hong Kong.

Currently, the insurance industry has a tough road ahead if it is to make cyber security insurance a must-have for most businesses.  A 2015 Risk and Insurance Management Society Cyber Study shows that only 51% of its respondents purchased stand-alone cyber policies. Fifty-eight percent of those policies carry less than $20 million of coverage. In addition, the premiums of 49% of those policies exceed $100,000, which is quite high for many small to mid-sized companies. The good news is 74% of those without insurance for a cyber risk plan can purchase a policy right away.


Some Solutions

Information from numerous avenues has made a clear case that cyber risk is the number one emerging and non-traditional insurance risk facing businesses today. As technologies continue to improve and expand, cyber risks will become more invasive and prevalent in business. PwC’s 2014 Global Economic Crime Survey saw 17% of businesses and 39% of the financial sector had been victims of cyber-crimes. In the past two years, these numbers have only continued to climb.

As a result, the federal government has attempted to at least track the problem to help the process of finding a solution. The Federal Cybersecurity Information Sharing Act was created to facilitate companies sharing cyber threat information and their best practice guidelines to prevent the attacks. However, many businesses fear this does not solve the problem, simply because the reports are done only if data is lost and other filings must be completed. Therefore, insurance is still at a standstill when trying to truly determine the risk of cyber security issues.


The Actual Coverage

In this unstable environment of the launching of insurance offerings, not only are businesses trying to understand their risk, but they are trying to understand the new coverage.  Many carriers will cover loss of data and notifications to third party victims, as well as associated fines and issues resulting from the end client’s loss. However, if money is transferred between the first party and the scammer, it is unlikely the insurance policy will pay back that money as it is not easily proven to the insurance company that the monies were given to the fraudster and that proper due diligence was conducted prior to parting with the monies..

 
 

Furthermore, since this is a relatively new idea for protection and the insured may have significant coverage gaps, cyber insurance may be too costly for some of the smaller, more at-risk firms to afford. Currently there is no cap on the premium and no true understanding of the risk for most business models. As a result, insurers are mitigating their potential losses by raising premiums based on access, not true risk.

There is still a lot of research and development needed to decipher and mitigate cyber risk insurance.  In the meantime, it may be best to speak with a person who deals almost exclusively in this field of insurance to understand the needs of each client in this field.