By Alison Varga, Commercial Manager.
There has been a lot of talk, media coverage and articles written about cyber crime and the importance of insuring against the possibility of a cyber loss. But do your commercial clients “really” need it?? Unless your commercial client is selling lemonade on the side of the road the simple answer is YES!
So what is a Cyber Breach? It is the failure to prevent an unauthorized third-party access to non-public informational managed by a business. This information can be both in paper form and electronic form.
From small retailers to large manufacturers, the risk of a cyber loss has never been more likely. Now is the time to discuss the potential devastation a cyber loss can have on your client’s business and to their clients. Understanding how your client protects sensitive information is a good place to start. From there, you can make suggestions to further protect the stored information and recommend a cyber protection product that will suite their needs.
There are two main elements to cyber coverage that you should keep in mind when recommending cyber coverage. The first is Cyber Expense coverage. This coverage is first party coverage – covers your client. Most Cyber Expense coverage products will help your client restore their computers, assist with public relations to advise the public of the breach and provide some business interruption coverage. The second is Cyber Liability coverage which is third party coverage – covers your client’ s clients. Should there be legal action brought against your client as a result of a cyber breach, Cyber liability coverage would respond.
With so many Cyber products available, it can be very overwhelming on which one to choose. Here are some key elements you should look for when offering cyber products:
- What limits are available for each Cyber Expense and Cyber Liability? Are higher limits available?
- Does the Expense coverage include Business Interruption?
- Is there a Waiting Period? If so, what is it?
- Is there coverage for Actual Loss of Net Income?
- Is the Coverage limited to Canada only?
- What are the Exclusions?
- What items are covered? Are employees cell phones covered if used for business purposes? Are paper records covered?
- Is there coverage for Cyber Engineering?
- What should your client do in the event of a Ransom Threat?
- Does the coverage include a Cyber Support Help Line?
- Does Cyber Support help notify authorities in Canada (due to Breach of Security Safeguard Regulations -BSSR and Europe – European Union General Date Protection Regulation – GDPR as required by law
In closing, Cyber threats are now the norm and should be discussed with all commercial clients. Hackers are getting smarter and we owe it to our clients to protect them the best way we can. Giving examples of cyber losses comparable to your client’s business will help them understand why Cyber Insurance is a must. Remember – Knowledge is Power!