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January 17, 2024
Do You Have Cyber Insurance?

Cyber insurance, also known as cyber risk insurance, is a type of insurance designed to protect businesses from the financial losses associated with cybercrime. This can include malware, ransomware, DDoS attacks, or other methods that compromise a network and sensitive data. It’s meant to complement a company’s cybersecurity defenses, not replace them, by providing financial support in the aftermath of a cyber incident.

Here’s what cyber insurance typically covers:

  • First-party coverage: Direct losses to a company, such as data destruction, hacking, data extortion, and theft.
  • Third-party coverage: Losses suffered by others due to a business relationship with the affected organization.
  • Legal expenses: Costs related to legal actions from a cyber incident.
  • Customer notifications: Required notifications to customers in case of data breaches involving personal information.

A cyber incident can happen at any time so understanding and mitigating risks is essential to investment advisors.  Review your cybersecurity and trade acceptance policies and procedures to ensure you take steps to safeguard your client’s information and assets when completing transactions.  Currently, there are approximately 151 insurer groups providing cyber insurance according to the National Association of Insurance Commissioners.  Review your insurance needs today to protect your business.

Resources used:

CybersecurityIncident - Glossary | CSRC (nist.gov)

DevelopingCyber-Resilient Systems; A Systems Security Engineering Approach (nist.gov)

www.naic.org

Key Terms: Cyber insurance, Cyber, Insurance, Data incident, Business risk, cybersecurity

RegVerse Team