Explaining the Value of Cyber Insurance!

In today’s current cyber threat landscape, it is imperative that companies ensure that they have a 360 degree cyber strategy to ensure that the risk to the business is mitigated. A 360 degree cyber strategy not only includes risk prevention measures such as firewalls, multi factor authentication, a solid password & access policy and business continuity plans etcetera but it also includes a solid cyber insurance policy in the event the prevention measures are not enough!

However, take up of Cyber Insurance is not where it should be considering the added value it can bring to your client’s risk management portfolio, therefore how do we convey the value and necessity of having a cyber policy to our clients?

Key Selling Points Of A Cyber Policy

Premium vs Value

Cyber Insurance policies may be an additional expense to your client’s insurance portfolio spend, however, the value of the cover that is derived from such a policy far outweighs the initial premium spend. Initial computer forensics and reinstatement of data after a cyber attack can run into the 10s of 1000s of dollars not to mention the damage to your client’s finances after paying a ransom or a fraudulent invoice. Typical cyber claims that we have seen can reach the 6 figure mark whilst premiums are only a small percentage of this! – This provide excellent value for money for the client and is one of the most important selling points of a cyber policy.

First Party Cyber Coverage Including Invoice Fraud & Ransomware

First party cyber insurance provides cover for financial losses caused as a result of a cyber event. This can include computer forensics costs, data restoration, securing the network, notification costs and much more. These services can run a cyber claim into the hundreds of thousands without dealing with any third party claims.

Invoice Fraud & Ransomware are two of the most common cyber claims seen across the market and can have a huge financial impact on your client. With financial losses running into the thousands, it is vital your client carries cyber crime insurance to mitigate this.

Third Party Cyber Coverage

Whilst most are concerned about first party financial losses, many forget that a claim could arise against the client by third parties that have also been affected by the cyber-attack. Cyber insurance can help provide cover should a claim arise from breaches in personally Identifiable Information (PII), breach of contract, negligent protection of data, network security breaches, transmission of viruses and denial of service attacks all of which are incredibly expensive claims.

Claims Examples

Providing some context as to the value of a cyber policy, below are some key case study examples we have seen recently which highlights how a cyber event could affect one’s business and finances:

An online CRM platform where, after a ransomware attack, clients could not access the platform and new users could not sign up -Total Claim Value $72k including payment of ransom and business interruption losses

A fraudulent invoice paid by an accounts team of a concrete supplier – Total Claim Value $127k including $60k invoice fraud and $67k in computer forensics and securing the network.

Online toy retailer suffered a DDOS attack bringing down the website – Total Claim Value ￡216k including business interruption losses totalling ￡120k and the remainder being restoration services and computer forensics.

Summary

Ensuring your client has a well-rounded insurance portfolio including cyber insurance is key to their risk mitigation strategies and, as illustrated above, the value that is provided far outweighs the consequences of a cyber event.

Should your client need a best-in-class cyber policy to manage their cyber exposures, please do get in touch. We work with the world’s leading cyber insurers and can source a bespoke policy suited to your client’s needs.

George Grimshaw

Account Executive - Cyber & Technology

Jensten Insurance Brokers