Cyber Security Insurance

It used to be so simple before the Internet era…If your employee stole cash from your business or forged a cheque, a crime insurance policy would cover it. If a non-employee broke into your business and stole money from the safe, a business combined would take care of the loss, under the peril of theft.

But the world we once knew has changed, and continues to evolve both socially and technologically….and it’s moving more quickly than ever.

Our businesses now depend upon technology and that reliance is expanding, as is cyber & data or ‘data’ theft and therefore our need to insure this evolving risk.

What if that same employee stole your customer’s credit card information or sold on sensitive information?

What if your computer network were hacked and your customer’s patented business information you were contractually obligated to protect was stolen?

Would your crime policy still respond?

The answer is, unlikely, hence why cyber & data liability insurance can be just as important as crime insurance to keep you and your reputation protected.

A crime insurance policy is designed to protect an insured business’ assets from theft by both employees and other third parties. Defined as a first party coverage, the policy is triggered if the insured sustains a direct loss because of theft.

It includes standard insuring agreements such as employee theft, forgery or alteration, theft on premises or in transit, counterfeit currency, computer fraud, funds transfer fraud and credit card fraud. It is very specifically designed to cover money, securities or other tangible property.

Cyber & Data liability policies are designed to insure loss of intangible property and the costs of rectifying systems damage. Think of your employee’s HR records, your company’s copyrighted material, formulas or documentation, your client’s personal information etc.

These are not tangible items, and thus not covered under a standard crime policy as mentioned above. The cyber & data liability policy also contains some first party coverages designed to directly reimburse you for specific costs and expenses associated with a breach.

Still unclear as to why do you need both? Each insurance policy serves a purpose in protecting your business’s assets, but neither covers all of the exposures. So in simple terms: –

Crime covers the fraudulently taking of money or property and Cyber & Data covers your IT system and data.

The truth remains that no ‘standard’ policy exists. And even though it may appear that crime exposures are addressed and covered in a cyber & data liability policy and vice versa, be wary of the exclusions, coverage triggers, and definitions. It is very likely that what may appear to be duplicate cover is far from it.

Busines News Wales:     Image: Nick Youngson

For more information on Cyber Security Insurance, please contact Cyber Security Intelligence, for advice.

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