Cybercrime is everywhere. You can’t turn on the news without hearing about it. Cybersecurity is a top concern for companies and individuals as a data breach can compromise your most sensitive personal and financial information. These attacks are becoming more sophisticated over time and can occur through amateur everyday hackers or can even be perpetrated by large international rings of cyber criminals.
Once you’ve been compromised, it’s hard to recover your losses, especially without a cyber insurance policy to cover any legal and financial implications of a data breach. We’ll review some of the features of a cyber insurance policy and some of the top insurance companies offering cyber insurance.
The Cyber Insurance Policy
The purpose of a cyber insurance policy is to aid in recovery of an individual or company after a cyber breach has occurred and pay for legal defense costs arising from first- and third-party liability claims. The policy came to be around 1997, first written for AIG for technology companies. First-party expense coverages were started to be offered around the mid-2000s.
The cyber insurance policy pays for damage claims from first- and third-parties who have caused injury because of a cyber security breach. Some of the common types of coverage provided by a cyber insurance policy include investigation, business interruption losses, data breach notification expenses and legal expenses associated with any lawsuits arising from the data breach. (This could include legal settlements, regulatory fines and, in some cases, cyber extortion costs from ransomware.)
Top Companies Offering Cyber Insurance
Chubb has a large suite of cyber liability products for business owners — no matter their size — as well as resources (available to policy-holders from third-party service providers) to help businesses respond quickly when a cyber breach occurs. The cyber liability line of products from Chubb is one of the most comprehensive cyber liability insurance for business owners available. There are four cyber policies available to business owners through the Chubb suite of cyber liability products:
- Cyber Enterprise Risk Management (Cyber ERM): Policy holders have access to enterprise risk management solutions. The policy covers cyber incident response expenses with $10 million in limits available up to a maximum coverage of $100 million for global coverage.
- DigiTech® Enterprise Risk Management (DigiTech ERM): This policy combines cyber insurance with loss mitigation and incident response services. Most classes are eligible for $10 million in limits up to $100 million for global coverage.
- Integrity+: The Integrity+ is a policy with four separate coverages that can each operate as a standalone coverage, or in combination. These include: errors & omission liability, destructive programming liability, cyber liability, and disclosure of confidential information, intellectual property (IP) infringement, and reputation disparagement.
- Forefront Portfolio 3.0: CyberSecurity Insurance: This policy offers comprehensive cyber liability (third-party) and expense (first-party) coverage, cyber expense coverage (including notification and crisis management expenses, e-business interruption coverage, e-threat coverage, and e-vandalism coverage), and more. Optional coverage includes payment card industry assessments and e-business interruption coverage for service providers.
Chubb is the world’s largest publicly traded P&C Insurer and hold 36% market share in the cyber insurance market for package policies in 2019. Chubb has a financial strength rating of “A++” from A.M. Best's 2020 review.
#2 Liberty Mutual
Liberty Mutual offers “Data Compromise and CyberOne” endorsements to its small business owner customers BOP policy. The data compromise endorsement has an annual limit of $50,000, which offers first-party coverage for expenses resulting from a personal data breach. The endorsement includes $5,000 limits for legal and forensic information technology reviews, and for crisis communication services.
An additional resource available to policy holders is access to eRISK Hub®, a data breach portal which gives resources for managing cybers risks and data breach notification requirements. The CyberOne coverage provides coverage for third-party liability claims and defense costs from legal suits as the results of a data breach.
Liberty Mutual Insurance Group has an “A” Excellent financial strength rating from A.M. Best and has an “A+” rating from the Better Business Bureau.
CNA offers options in its cyber liability (data breach liability) policy for business owners: CNA CyberPrep, CNA NetProtect 360®, EPS Plus and Epack 3. Coverages include network failure, wrongful collection, harm to the business' reputation, voluntary shutdowns and more. EPS Plus includes E&O liability coverage. Epack 3 is only available in 36 states.
CNA is one of the largest commercial property and casualty insurer in the U.S. and has an A.M. Best financial strength rating of “A” Excellent.
Travelers Insurance offers a cyber liability policy to owners along with pre-breach services to help businesses achieve a higher level of cybersecurity. Other resources for policy-holders include cyber coaches and Travelers Cyber Academy. Cyber liability insurance from Travelers is designed to protect multiple industries and business sizes and includes specialized policies for technology companies, public entities and small businesses. Coverage options include breach notification to customers, credit card monitoring services, cost of a public relations consultation, forensic fees to identify and resolve the cause of the data breach, and defense and settlement costs. Coverage can be customized based on need.
The Travelers Insurance Companies all have an “A” or higher financial stability rating with A.M. Best.
AIG provides options in its cyber liability coverage to business owners as well as preventative services to help improve cyber security and prevent incidents. There is a 24/7 claims hotline for immediate assistance. The cyber liability policies from AIG pay for third-party losses resulting from a data breach, event management costs, network interruption expenses, extortion expenses, property damage, products/completed operations coverage and more.
In 2018, AIG won the Advisen Cyber Risk Innovation of the Year award for its CyberMatics app. AIG has an “A” financial strength rating from A.M. Best's 2020 review.