The Danger of Not Having Adequate Cyber Insurance Coverage

The Danger of Not Having Adequate Cyber Insurance Coverage
Cyber theft is a risk that is getting the attention of many business owners today. Alarmingly, 55 percent of small businesses have experienced some form of a cyber attack in the past 12 months. Even more astonishing, 60 percent of small businesses that experience cyber theft have to close their doors within six months.
Many Businesses Don’t Have Adequate Cyber Insurance Coverage
With the growing reliance on technology and cloud-based tools in the workplace, it’s evident that cyber security will be a concern that businesses have for years to come. From an insurance carrier’s perspective, the lines become blurred about how to categorize losses due to cyber theft. In many cases, business owners may not have the adequate insurance coverage in place to protect themselves from a loss related to cyber theft.

Traditional property and liability policies cover most first and third-party losses as they relate to commercial crime, personal injury, and errors and omissions. However, there are some gray areas in regards to coverage for cyber theft. In response to the growing threat of cyber attacks, savvy business owners are choosing to take out cyber policies. What many business owners don’t realize, though, is that cyber policies typically exclude coverage for losses related to theft.

Because the occurrences of cyber theft are only going to increase, the property and casualty insurance industry will need to come up with a solution to protect these vulnerable businesses. Already we are seeing the emergence of a single-peril cyber policy that is prepared to respond to physical property damage, products liability, and bodily injury due to a cyberattack.

The Value of Talking to Insureds About Cyber Insurance Coverage
Given the increase in cyber attacks in recent years, insurance carriers need to make sure that insureds are adequately covered when underwriting policies. The evolution of inspection technology in recent years has minimized the interactions that occur between the insurance carrier and the insured; however, this face time with insureds is important now more than ever to accurately underwrite risk.

Our team at Insurance Risk Services has been partnering with insurance carriers in the property and casualty insurance industry for more than 35 years to provide them with accurate underwriting support. While we utilize the latest inspection technology to create our custom reports, we also bring a lot of value to the partnership by conducting in-person property inspections. During these conversations with insureds, we can identify gaps in coverage and make them aware of additional ways that the insurance carrier can best serve their needs.

Insurance carriers can’t replace the value that an in-person property inspection provides with inspection technology. Contact us at Insurance Risk Services to learn more about how insurance carriers have been trusting our seasoned professionals for more than 35 years to best determine which risks are worth taking.