Cyber Insurance and Social Engineering Fraud, Why Voluntary Transfers May Not Be Covered By Your Insurance Policies – February 2016
Holland & Knight
Description
February 2016 | Volume 21 | Issue 2
What You Should Do Now to Protect Your
Company
1. Talk to your insurance broker about
social engineering coverage today.
As noted above, social engineering fraud coverage is generally available upon request and
without a signiÂŽcant additional premium. This
type of fraud is not going away and even the
strongest controls can be breached. If you cannot
stop fraud, at least you can minimize its eÂect.
2.
Review other potential gaps in your cyber liability insurance program. There is no standard cyber liability insurance form which means that the coverage oÂered by one insurer may (and often does) diÂer dramatically from that oÂered by another insurer. There is little agreement between insurers on what should be covered, when the coverage should be triggered or even how basic terms should be deÂŽned. These diÂerences make understanding what is and is not covered very diÂcult.
It also makes it nearly impossible (or at least foolish) to purchase this coverage based on price alone. Companies are well advised to work with an experienced and knowledgeable insurance professional that understands both what coverage is available in marketplace and the types of claims being made on the policies. 3. Understand how your cyber insurance coverage works with your other insurance policies. Cyber liability policies are not the only place 2 Cyberspace Lawyer where an insured might ÂŽnd coverage for a cyber event. Depending on the losses and/or allegations, several other types of insurance policies may also respond to a cyber-related claim. Understanding where there may be coverage for a claim as well as how the various lines of coverage will work together in the event of a claim is imperative to a strong insurance program.
Coordinating limits, retentions/ deductibles and other coverage requirements may be diÂcult. In addition, because multiple types of policies may apply, there may be problems coordinating defense counsel (diÂerent insurers may not approve of a ÂŽrm required by another insurer or there may be disagreement between insurers about reasonable hourly rates). The claims made requirement of many of these policies may also present problems for insureds in the event of a claim.
Insureds are well advised to coordinate their coverage in advance so they are not attempting to resolve these issues for the ÂŽrst time after a cyber event has occurred. Conclusion Cyber insurance is still evolving. Insureds must take the time to learn what coverage they need and what coverage they have to ensure they are adequately protected. In addition, insureds should have a plan in place to deal with the complexity of having multiple lines of coverage that may apply to a single cyber event.
A little preparation can avoid signiÂŽcant problems with coverage in the event of a claim. K 2016 Thomson Reuters .
Review other potential gaps in your cyber liability insurance program. There is no standard cyber liability insurance form which means that the coverage oÂered by one insurer may (and often does) diÂer dramatically from that oÂered by another insurer. There is little agreement between insurers on what should be covered, when the coverage should be triggered or even how basic terms should be deÂŽned. These diÂerences make understanding what is and is not covered very diÂcult.
It also makes it nearly impossible (or at least foolish) to purchase this coverage based on price alone. Companies are well advised to work with an experienced and knowledgeable insurance professional that understands both what coverage is available in marketplace and the types of claims being made on the policies. 3. Understand how your cyber insurance coverage works with your other insurance policies. Cyber liability policies are not the only place 2 Cyberspace Lawyer where an insured might ÂŽnd coverage for a cyber event. Depending on the losses and/or allegations, several other types of insurance policies may also respond to a cyber-related claim. Understanding where there may be coverage for a claim as well as how the various lines of coverage will work together in the event of a claim is imperative to a strong insurance program.
Coordinating limits, retentions/ deductibles and other coverage requirements may be diÂcult. In addition, because multiple types of policies may apply, there may be problems coordinating defense counsel (diÂerent insurers may not approve of a ÂŽrm required by another insurer or there may be disagreement between insurers about reasonable hourly rates). The claims made requirement of many of these policies may also present problems for insureds in the event of a claim.
Insureds are well advised to coordinate their coverage in advance so they are not attempting to resolve these issues for the ÂŽrst time after a cyber event has occurred. Conclusion Cyber insurance is still evolving. Insureds must take the time to learn what coverage they need and what coverage they have to ensure they are adequately protected. In addition, insureds should have a plan in place to deal with the complexity of having multiple lines of coverage that may apply to a single cyber event.
A little preparation can avoid signiÂŽcant problems with coverage in the event of a claim. K 2016 Thomson Reuters .
