Commercial risk insurance policies for cyber breaches continue to evolve as the standard commercial liability policy may not cover a data breach or cyber loss. It is neither bodily injury nor property damage. Cyber policies provide coverage that assist with the cost of addressing the mechanics of a data breach and also help a business with the significant costs of compliance with notification requirements. “Cyber breaches have become among the largest, most costly exposures for companies of any size, with sensitive proprietary and customer information data stored on mobile and desktop devices and networks at greater risk than ever,” reported the National Underwriter Company’s Property Casualty 360 in August, 2013. “The cyber insurance-related sales opportunity for brokers and carriers is massive, as breaches can cost even the smallest clients millions when – not if – data is compromised.”
“How costly?” the article asks, then answers: “NetDiligence’s 2012 Cyber Claims Study found the average cost per breach was $3.7 million, compared to $2.4 million the prior year. These figures include dollars spent for legal defense, counsel and settlement, forensic investigations, notification of customers, call center staffing and credit monitoring.” Cyber breach insurance includes three areas of coverage, including liability defense and settlement arising out of an insured’s failure to protect private data, remediation, including investigation public relations and customer identification and notification, and fines or penalties imposed on the insured for allowing a breach.
Handling a cyber-breach claim requires savvy adjusting skills. These skills and more are taught in Crawford Educational Services classes or online at Knowledge Management Center (KMC) on Demand courses.
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