Risk business: What is covered by cyber insurance? Experts explain | ROI-NJ

New Jersey is a land of opportunity for cybercriminals.

said Frank Costa, principal and chief growth officer of insurance brokerage World Insurance Associates, which has more than 20 offices in New Jersey. While all companies are vulnerable to cyber risks, he said, New Jersey companies represent a large cross-section of highly concentrated cyber attack targets: technology, healthcare healthcare, manufacturers and distributors.

Another New Jersey industry, hotels, was hit by a cyberattack in September, according to a Reuters report, which noted that hackers took down multiple systems of MGM (owner of the gaming resort). play Borgata in Atlantic City).

However, even with large-scale cyber attacks occurring regularly, there is still a gap in insuring against cyber risks, notes Patrick Wraight, director of the Insurance Academy Insurance Journal. : Most commercial property and commercial general liability policies will exclude losses related to cyber risks, so businesses should consider a cyber insurance policy. Prominent among those risks, he said, is the security of their processes and data.

Costa pointed to a long list of cyber risks that companies face: data breaches (unauthorized access to sensitive information); ransomware attacks; phishing and social engineering (manipulating employees to intentionally share information); insider threats; malware, denial of service and supply chain attacks; Internet of Things devices are compromised; mobile device vulnerabilities; and fraud targeting financial transactions and payment systems.

Hayden Kopser, co-founder and president of Westfield-based insurance brokerage North Improvement LLC, asserts that ransomware/cyber extortion and social engineering are cybercrime segments that can lead to result in direct financial loss and potential business disruption.

The rise of remote work has exacerbated these threats.

Kopser added that with the variety of ransomware/cyber extortion scenarios and social engineering attack methods expanding, these two areas will continue to be a problem for businesses operating online in any capacity.

Cyber ​​insurance policies help protect against cyber risks. The coverages cover the costs of responding to a data damage, computer hacking and cyber extortion, data damage liability, cyber security liability, electronic media liability and identity recovery.

But insurance isn’t enough, Wraight said: People need education, training, experience and vigilance. And that takes effort.

Cyber ​​liability insurance may include technology errors and omissions insurance (for technology companies), media liability insurance (for marketing and risk companies) or crime insurance (for many companies). Costa notes that traditional cyber policies include first-party coverage (which covers the company) and third-party coverage (which covers others) issued at limits of $1 million or more. go up.

Costa points out that some carriers offer cyber coverage in addition to property/liability plan or business owner’s policies, but these policies typically include coverage limitations and lower limits than are reasonably required, Costa points out: All businesses should evaluate their cyber liability policy independently and not rely solely on other policies. main policy with online add-ons.

Standalone cyber insurance policies account for the majority of cyber insurance premiums, according to Sullivan, according to insurance ratings agency AM Best Co.

Insurers have tightened underwriting language and reduced limits on high-risk threats, such as cyber extortion, and coverage for regulatory violations such as these, Kopser explained. relating to (Telephone Consumer Protection Act).

Since the pandemic, cyber risk insurers have been demanding much higher premiums. They have also raised their standards for insureds, such as by requiring policyholders to keep anti-virus software up to date and mandating multi-factor authentication for their login information. staff. Service providers are also offering free or discounted access to cybersecurity software.

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Please contact the World Insurance Association at: worldinsurance.com or call 732-380-0900.

Reach North Improvement LLC at: northimprovement.com or call 212-495-9172.