How Will Your Company Fund an AI-Based Loss?

Today, a friend called me, as she does every year on November 1st, All Saints Day: 'Hey Cyber Dawn, how did your live event go?" Well, something spooky happened and things did not function or record properly! It is a Halloween thing -- that occurs unexpectedly on October 31, All Hallows' Eve.

Taking it as a sign, I will offer a series of videos on AI and cybersecurity best practices instead and dive into my lifelong passions of research and writing. YES, I will continue sharing my weekly LinkedIn Newsletters and posts, but I have the nudge to do even more.

There must be a way to reach business leaders and their teams to get them over the hurdle of resistance regarding safety, security, and frankly, ensuring their ROI and sustainability from their shiny new AI tool.

Her advice to me was: “It’s time for you to create a course or series of courses!”

Then she asked me a more serious question: “What happened to concern about silent cyber? Do insureds need to look more closely at policy wordings regarding AI as we renew our cyber insurance policies?”

My reply was, first, I am no longer affiliated with an insurance broker, and second, I would encourage every insured to obtain a complete understanding of the policy (including exclusions) in which you are investing.

Here is an excerpt from my book 33 Ways Not To Screw Up Cybersecurity, #29 Cyber Insurance:

“You may have heard the term “silent cyber.” Do not assume that your commercial crime policy or business owner’s policy affirmatively covers cyber losses. Do you want to rely on the discretion of a court to decide your matter? Coverage disputes are costly and time-consuming with no guarantee that a court will find coverage under policies that do not affirmatively cover cyber losses.

Refer to Chapter #23 ransomware (cyber extortion) and Chapter #26 business email compromise (BEC). These losses are at an all-time high in frequency and severity. The time is now to invest in cyber insurance – unless you have the funds to pay for the losses out-of-pocket.”

Kristy, Dawn. 33 Ways Not To Screw Up Cybersecurity (p. 117). Networlding Publishing. Kindle Edition.

Your company needs to be prepared to fund a cyber loss, including an AI-based cyber loss. Since cyber insurance is not a standard policy form, you need to assess your priorities and express them to your broker. You do not want to experience insurance coverage litigation in which a court decides whether your policy was silent or not on a particular coverage.

Our conversation got me thinking about how the insurance market is making adjustments in the age of AI.

On one hand, insurers are using AI tools for efficiency and productivity, like many other industry verticals. On the other hand, insurers will face an uptick in AI-based insurance claims. Consider some of the lines of insurance that could be impacted by AI: cyber, professional liability, Directors and Officers, commercial general liability, auto insurance, builders risk, product liability, libel and slander, intellectual property insurance, and more.

My journey of research, writing, and course creation begins now! This could be useful content and knowledge for my clients, subscribers, and audience.

What are your thoughts?

#TheCyberDawn #cybersecurity #AI #cyberinsurance #silentcyber #policywording