Things to Know About Cybercrime Insurance Policies

Yes, we know: The last thing in the world that you probably want your business to have to pay for is yet another insurance policy for yet another kind of loss. But before you say no, take a moment to consider cyber fraud or cybercrime insurance policies.

You live in a world of phishing, hacking, ransom-ware demand requests, and other types of cybercrime. And depending on what kind of business you are in, you may also have to worry about stolen customer information, wire transfer fraud, or fraudulent signatures.

Taking Precautions on Your Own

Before you run out to get insurance for these kinds of cybercrimes, remember that any insurance policy is going to want to see what you are doing, on your own, to lower or minimize the threat of cybercrimes. Firewalls, multi factor authentication, and other methods to secure systems, networks and data, will help your insurability, and will help you get a lowered premium once you find an insurance provider.

Look at the Policy

If you do feel you are already insured for cybercrime, take a second look. Many insurance policies will cover you for certain types of cybercrimes, but not others. For example, just because a policy insures you for, say, ransomware, doesn’t mean you are insured for phishing attacks or social engineering attacks.

Additionally, make sure you are actually covered for crimes. There is a difference between insurance for, say, network outages that may cost you money, or interruptions in your IT systems, and actual cybercrimes. Some policies cover one, but not the other.

Even if you are covered, you want to make sure you have a policy that also covers you for incidental losses—for example, for the costs of damage to your system after a hack or fraud, and the expense of upgrading security after an attack. Some policies will even pay for legal fees or penalties assessed by government agencies, in the event you are fined or penalized because of a cyber-attack.

What is the Cause?

Many times computer crimes or fraud, work in harmony with non computer, real world errors.

So, for example, imagine a fake or falsified email that asks a company employee to provide a password. The employee then does provide the password, and the fraudster uses that password to steal sensitive or important data or even money.

Was that loss caused by the cybercrime—the fake or falsified email–which would be covered under the cybercrime insurance policy? Or was it caused by the employee’s failure to verify the veracity of the email, and the employee’s choice to provide the password, an action that is outside of the email scam, and thus, could be denied by the insurer?

In many of these cases, courts will look to the root cause of the loss, to see if it was human error, or whether it was the cybercrime. Because many of these crimes are a combination of both, it makes it all the more important to minimize human error, with comprehensive training for company employees.

Cybercrime can have serious legal consequences. Let the West Palm Beach commercial litigation lawyers at Pike & Lustig help you with your insurance and legal data security issues today.

Sources:

bluevoyant.com/knowledge-center/5-types-of-cyber-insurance-coverage-and-what-to-watch-out-for

rtinet.com/resources/cyberglossary/cyber-insurance