We surveyed dozens of attorneys who are under the impression that they don’t need cyber because their professional liability policy covers them for a breach of confidentiality as confidentiality is a duty and a part of providing their professional services. While this is correct, does cyber insurance only cover breach of confidentiality?
Recent attacks against law firms include the threat to post their clients’ confidential data publicly on the internet unless a ransom is paid. Professional Liability insurance would cover the lawsuit from the damaged client for breach of privacy. Professional Liability would not pay the ransom or other expenses related to the cyber event.
Now that the lawyer has had their client’s data strewn all over the internet, will the Professional Liability Policy provide coverage for damage to reputation and reputational loss?
There are a whole host of other cyber perils that the lawyer is ignoring: funds transfer fraud, bricking, and crypto-jacking are a few. Do those risks sound familiar, of course! Covered by Professional Liability - No!
Every company needs Cyber Insurance.
The limitations to traditional Crime, Business Owners Policies, and General Liability have been tried and tested in courts and coverage for digital risks are seldom covered. The aforementioned traditional policies are named perils and almost always address physical damage of a tangible asset, or bodily injury. While a computer and its components represent physical property, the manipulation of code or information stored on a hard drive is not physical property and is best protected with a cyber policy.
There are some very gray areas in Crime and Media coverage, but for the most part brokers should think about not what is covered by the aforementioned, rather what is not covered:
Getting a quote for cyber insurance is not an easy process and quotes are not guaranteed. Unprepared applicants may be declined or will be offered substantially weaker coverage and much higher premiums.
The application process can be extremely helpful as discussed above. Brokers should prepare their clients in advance of sending applications to market. The following are some steps and practices to to prepare for the cyber insurance application.