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The Cold Truth about Cyber Insurance
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DouglasF354
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DouglasF354,
User Rank: Author
11/12/2019 | 4:20:31 PM
The fuzzy line between security and insurance
Numerous strong points. In particular, the balance between 'applying security controls' and 'insurance for impact costs'. The key questions that come to my mind are:
  1. How do we draw the (fuzzy) line between 'we want to spend on security to control some breach impact' and 'we want to spend on insurance to cover the rest of breach impact'?
  2. How do we robustly demonstrate the above to insurers so we can negotiate better premiums and increase the likelihood of greater pay-out in the case of breach impact?

No easy answers, but an intriguing.
JeffreyS042
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JeffreyS042,
User Rank: Apprentice
11/11/2019 | 5:24:39 PM
Reliance on Cyber Insurance
Some great stuff here......also some problematic comments.  Lots of similarities in the information security and cyber insurance worlds.  Most namely, early product versions of both weren't very good.  It is not the intent of cyber insurance to cover IP risk which is best covered by other insurance, namely Intellectual Property insurance This coverage is available and can cover both defense and enforcement expenses 

Anyone relying 100% upon cyber insurance for security is foolish.  

Unfortunately, we are seeing more infosec professionals mistakenly use misleading and inaccurate examples of claim denials such as Sony, Mondelez, Bank of Blacksburg etcetera which did not involve stand-alone cyber policies. Other citings involve very early versions of cyber policies.

Best practice is to consider cyber insurance as the last piece of the cyber risk management puzzle.  Use a broker with expertise, get multiple quotes and make sure to review the policy including conditions and exclusions.  If you want to use your own IR folks, try to negotiate that into the deal. 

Auto insurance is not a cure for reckless driving. The same is true for cyber insurance.
mcavanaugh1
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mcavanaugh1,
User Rank: Strategist
11/8/2019 | 10:51:37 AM
Cyber Insurance far from perfect but getting better
"One of the most famous examples of this involved Sony cyber insurer (Zurich American Insurance Co.)'s refusal to compensate the multinational conglomerate for an estimated $2 billion in losses from a 2011 data breach of 77 million users' personally identifiable information. Even after Sony brought Zurich to court, Zurich let Sony know that its policy did not cover any third-party hacking incidents."

The first sentence of the Sony v Zurich article referenced states that the argument was over a Commercial General Liability (CGL) policy, not a Cyber policy.

The Cyber Liability industry is far from perfect but the quality of coverage, case law, and services being provided is consistently getting better. Cybersecurity is a risk that can only be managed not solved with insurance being one portion of a full risk management program.  There are many insurance companies that are trying to add value through the risk management services being provided to policyholders including tabletops, sample incident response plans, and general coaching provided by security firms.  An increasing number of Insurtech companies are creating policies with a package of proactive risk management, scanning, and notifications to insureds to help smaller companies become better risks.  One or two will even give the insured a reduced deductible if it is found that they have implemented Multifactor Authentication.

Just like a company would use quality 3rd party vendors for other business processes, it is important for firms to work with educated agents/brokers to understand their cyber liability insurance policy & requirements to ensure that coverage would apply as expected in the event of a loss.


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