One of the most common questions I get from clients and prospects is, besides General and Product Liability Insurance, what other types of insurance policies are important for our business? The first recommendation is usually Worker’s Compensation because this insurance is required by state law; however, if you are transacting business online, the second insurance policy we recommend is Cyber Risk Insurance.
Simply put, more and more of businesses are moving from the physical world to the electronic/virtual world. The pandemic only sped up this transition and as a result, the number of cybercrimes is increasing at an alarming rate. Because of the rapid increase in the number of cybercrimes, most established Cyber Risk insurance providers are requesting 40% to 80% premium increases on their renewals, or they are restricting/narrowing the coverages on their Cyber Risk policies.
When insurance claims increase, insurance companies will often use 3 common methods to remain profitable. The first is to increase their premiums. The second is to narrow/restrict coverages in the policy. The third is to limit the payout limits for covered claims.
When considering purchasing a Cyber Risk policy, it important to understand the following:
While it is easy for most to understand what Cyber Extortion means, Social Engineering Fraud is a little more complicated to understand. Social Engineering Fraud coverage is for claims involving business email compromise or phishing, invoice manipulation, cryptojacking, telecom fraud and funds transfer fraud.
This blog is trying to give the reader a basic understanding of current Cyber Risk marketplace and the depth or lack of depth Cyber Risk policies can offer. If you want more information the types of coverages comprehensive policies offer versus basic coverages offer, please feel free to give us a call at 800-622-7370 and ask for Paul with your questions us and we will be happy to the list of coverages offered or sample policy forms from the insurance providers.
3014 Devine St.
P.O. Box 5866
Columbia, SC 29250
1-800-622-7370 Toll Free