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You’ve likely heard of these terms, or a variation on them: Cyber Liability, Network and Information Security Liability, Communications and Media Liability, Privacy Liability and Expense coverage - these are examples of some increasingly popular generic terms that relate to new insurance coverages that have emerged to address new exposures. I shouldn’t say new, as we have been providing forms of this coverage, and the first ones were actually called Computer Services E&O, since the early 1990’s. The traditional array of insurance policy offerings that we are all used to buying haven’t changed to meet the digital and communication exposures that exist in the way we do business today. These policies have emerged as a separate line of insurance.
There are 24 carriers that we’ve identified as offering some form of this coverage today. The breadth of coverage provided by these various carrier product offerings is highly disparate. We have analyzed these policies with the intent of determining the scope of what is available. We thought that it may be helpful to know what is generally available, and what coverages may be relevant to your organization. What’s outlined below is a summary of the eight coverage parts offered by the marketplace; all or a combination of these coverage parts can generally be included in one combined policy. 1. Network/Information Technology Security Coverage – do you keep or store data for others?
2. Web-Media Communications Coverage – do you have a web presence?
3. Privacy Coverage – do you store PII – personally identifiable information?
4. Privacy Breach Containment Coverage – for the immediate costs of data breach.
5. Technology Extortion Coverage
6. Data Restoration Loss Coverage
7. Crime coverage for computer fraud and funds transfer fraud
8. Miscellaneous professional services
Insurance is great, as when a company suffers what could be a financial disaster, it is important to have a pile of money from an insurance company. However, insurance is oftentimes not the most elegant form of risk transfer. It is always best to first consider these exposures, and then think thru what else we can do with them, and how to avoid or mitigate them. We encourage you to develop a data breach and redundant technology plan, and with our associates we can help you with that. This way, the exposure is reduced and better controlled, and the insurance is less expensive. Applications for this insurance coverage will ask about what plan you may have in place.
Ping me on the calendar below and let’s talk. Thank you for reading.
Dan Gilligan, CEO Paradigm Insurance Services, LLC