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How Cookie-Cutter Cyber Insurance Falls Short
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DavidL814
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DavidL814,
User Rank: Apprentice
10/15/2014 | 4:39:07 PM
Re: not too surprising, really...
In some product lines, insurance companies have been known to be quick to collect premiums and stingy on the coverage.  The modern day cyberliability insurance policy is the exception.  If you bought coverage when there were limited insurers 5-10 years ago, you might have had some coverage gaps as highlighted in this article.  There were very recognizable insurance companies offering substandard coverage.  At the same time, there were lesser known insurers giving very real and broad coverage at a great price.  Most policies (from 50 insurers now) will cover paper records, regulatory actions, regulatory fines and penalties, a whole host of risk management services, hotlines, call centers, forensics work, penetration testing and more.  Failure to encrypt exclusions are very rare.  The insurers that didn't clean up their act were quickly replaced by new entrants.  I wouldn't be too cynical about this product anymore.  It's cheaper than ever and more broad than you could have imagined 5-6 years ago.  The exception might be if you are a major retailer, the insurers are rightfully very cautious about that class right now.
soozyg
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soozyg,
User Rank: Apprentice
10/6/2014 | 8:27:33 PM
Re: that much trouble?
@Marilyn, I supposed a main reason why the clause would be there is that IF one of those agencies take legal action against a company, the amount of time and money spent to fight the charges is so scary, and brings such bad publicity, that it behooves a company to protect itself against that action.
Sara Peters
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Sara Peters,
User Rank: Author
10/6/2014 | 4:24:54 PM
Re: Cookie-Cutter Cyber Insurance Falls Short
@MercyK29  Thanks for the offer! And you make a point I hadn't even thought of: It isn't just the people buying insurance that need education, it's the people selling the insurance too. Compared to other forms of insurance, cyber-liability insurance is new, different, and covering the kinds of incidents that most people don't even think about. There's got to be a learning curve for agents as well as would-be policy-holders.
MercyK249
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MercyK249,
User Rank: Apprentice
10/6/2014 | 4:06:51 PM
Cookie-Cutter Cyber Insurance Falls Short
There are some really good policies that provide the coverages and rather competitively.  But you do need an agent who has really looked at a lot of them and tracked the coverages.  Some are very bad for retailers and health care.  If anyone needs to know about specific coverages from specific companies, let me know and I will be happy to get the information for you. 
Sara Peters
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Sara Peters,
User Rank: Author
10/6/2014 | 3:36:01 PM
not too surprising, really...
They're insurance companies. Of course they're going to do their best to take a lot and pay out a little.  :)   Great post! Hopefully companies -- CISOs, CIOs, CFOs, risk officers, legal departments, etc. -- will begin to get smarter about what these policies do and don't do. And hopefully, as more players enter the market, competition between all companies will make them try harder to get business.  
Marilyn Cohodas
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50%
Marilyn Cohodas,
User Rank: Strategist
10/6/2014 | 3:18:59 PM
Re: that much trouble?
Thanks, @MercyK249. I would assume that the same probably applies for Sarbones-Oxley and other regs...
MercyK249
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50%
MercyK249,
User Rank: Apprentice
10/6/2014 | 2:53:39 PM
Re: that much trouble?
HIPPA can affect all employers that have health nsurance for their employees and the States Attorney Generals can level fines in 47 states for not promptly notifying "records" that there may have been a breach.   Many policies provide coverage for fines, but you have to specifically ask to make sure.
Marilyn Cohodas
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50%
Marilyn Cohodas,
User Rank: Strategist
10/6/2014 | 2:07:43 PM
Re: that much trouble?
That's a good question @soozyg, how rigorous is the enforcement of those agencies. And does the same exclusion for legal actions stemming from breaches due to failures of security standards of, for example, HIPAA, apply?
soozyg
50%
50%
soozyg,
User Rank: Apprentice
10/6/2014 | 12:13:39 PM
that much trouble?
potential legal action brought by the Office of Civil Rights, the Department of Health and Human Services, and the Office of the Attorney General,

Do that many companies have issues with these offices that the clause needs to be included?


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