#34: Cyber Security Series Pt.2 – Cyber Insurance

In this episode of The Power Up Project, we cover:

>Part 2 of our five-part cyber security series – Cyber Security Insurance

>What is cyber insurance?

>Why your business needs a cyber insurance policy.

Transcript:

In the second of our five part series on cyber security defences. We’re going to be talking about cyber insurance.

Welcome back to the Power Up Project. Great to have you here and welcome to episode number two in our five part series on our most effective cyber security defenses for your business. Last week we touched on the importance of having an intelligent firewall in place within your business. In this episode we’re going to talk about cyber insurance. Now cyber insurance is exactly what it sounds like. It is an insurance policy specifically designed to come to your aid in the event of a cyber security breach. This is not a bit of technology. This is indeed an insurance policy that you need to be talking to your insurance broker about. So it’s been really interesting watching cyber insurance policies evolve very rapidly over the last few years because they really are quite new and a lot of insurance brokers particularly, but also some insurance providers, some insurance companies don’t really seem to yet have a good handle on what cyber insurance is.

In the early days, just a few years ago, when you fill out the disclosure form to take out a cyber insurance policy, it was a very short form. It didn’t have a whole lot of questions on there around your technology, around what you were doing to protect yourself in terms of cyber security risk, that sort of thing. It did ask the usual business and financial level questions, I guess, so that the actuaries knew what degree of value (I guess) they were insuring. But interestingly enough, they didn’t really know what questions to ask in order to properly assess their risk. Now every year since when the forms come back out to renew a cyber insurance policy, the forms are getting longer and longer and longer. So the insurers are really starting to learn what questions they need to be asking in order to assess the risk associated with a particular business.

So, some of the policies that we’re also hearing about now are starting to go into detail about what your business is doing to mitigate that risk. They’re starting to ask fairly detailed questions about what type of firewall you have in place, who manages your IT, how often a certain parts of it audited, things like that. Now of course the depth of all of these questions and so on will depend on the insurer, depend on the nature of your business and so on. But the point of cyber insurance really is to come to your rescue when a breach has actually occurred because you may very well find that a lot of your other insurances will not cover you in such a situation, which is why you need a specific cyber insurance policy.

So my big hot tip for today in this episode is talk to your insurance broker and ask them about cyber security insurance. And, pro tip, if they don’t really know what they’re talking about, you’ll be able to tell if they do or don’t know. If they don’t, I would suggest that you need to find yourself a different insurance broker. There are some very, very good insurance brokers out there who will work long and hard on behalf of your business. And a lot of them are very, very clued up about cyber insurance and it is really becoming a non negotiable part of our insurance policies that we protect our businesses with.

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