What Does Cyber Insurance Not Cover?

If you’re thinking about getting a cyber insurance policy for your business, nonprofit or church in Florida, you’re probably looking for a way to financially protect yourself and your patrons in the event that someone hacks into your computer system and steals your data. However, before you purchase a cyber insurance policy, you need to understand what it doesn’t cover. Let’s take a look at the common items that many businesses believe are covered under a cyber insurance policy, but they actually aren’t.

Know What Cyber Insurance Doesn’t Cover Before You Buy

Cyber insurance is designed to financially protect your company if your network is infiltrated by bad actors, hackers and criminals. It can also help financially protect you if you’re the victim of a ransomware attack or data breach. However, cyber security insurance doesn’t protect against all threats. Let’s take a look at the scenarios that are typically excluded.

Cyber Attacks by Nation-States

If your company is targeted in a sophisticated nation-state attack, your cyber insurance policy may not cover the costs of the damage. Of course, in order to understand this exclusion, you must first understand the definition of a nation-state. A nation-state is a group of people in a territory that share a language, history and culture. These territories have known borders and their own government.

Theft of Your Business’ Intellectual Property

If your business’s intellectual property, trade secrets or highly confidential data is stolen, your cyber insurance policy may not cover the loss. This is because it can be extremely difficult to determine a precise value for a company’s intellectual property.

Threats from Business Insiders

Cyber insurance policies don’t often cover risks associated with insider threats. These are intentional or unintentional attacks by your employees, the contractors you hire or your vendors. These individuals may unintentionally download viruses or malware or not take the proper safety precautions to prevent hackers from infiltrating your systems. These insiders may also deliberately steal data by downloading it to their personal accounts or external devices.

Fines and Penalties

If your business experiences a data breach or cyber attack and a regulatory agency assesses fines and penalties, your cyber insurance policy will not cover those costs.

Business Interruptions Due to the Cyber Attack

Your company’s cyber insurance policy will not cover the costs associated with the interruption of your business operations due to the cyber attack. However, if you have a business interruption insurance policy, that policy may cover some of the costs of your business’ downtime due to the cyber security breach.

Ransomware Attacks with No Data Breach

There are two types of ransomware attacks, and they are often referred to as simple and complex. A complex attack involves the ransomware stealing data and then encrypting the data on the company’s machines. In order to unlock the data, the company must pay a ransom.

A simple attack involves the ransomware encrypting the data without any data actually being stolen. In order to unlock the data for company use, the business must pay the ransom. If a company is the victim of a simple ransomware attack that does not include a data breach, the cyber security insurance may not pay out.

Failure to Implement Security Measures

If your business doesn’t take steps to protect your data and keep your employees up-to-date on cyber threat training, your insurance company may not pay your cyber security claim. Implementing cyber security measures can include instructing your employees to use strong passwords, keeping all software up-to-date with the latest security patches, training your employees on how to spot suspicious emails and links, and implementing multi-factor authentication. Companies can also hire cyber security firms to help them develop security training and to stress test their systems. It’s important to note that this is not a comprehensive list and businesses will need to determine their own security measures.

Social Engineering

Your cyber security insurance policy may not cover data breaches that are the result of social engineering. Social engineering attacks trick participants into revealing sensitive information via impersonation. The impersonator may pretend to be a person the individual works for, a coworker or someone from a different department.

Cyber Security and Business Insurance from Fearnow in Florida

Protecting your business from cyber threats and financial loss from hackers, nation-states and criminals should be paramount, and at Fearnow, we can help you find the right cyber security insurance policy for your business. Cyber security insurance can help pay for data breach investigations, legal fees and ransomware attacks. It can even help pay for the professionals who will help you recover your data and repair your computer systems. We can also help you find additional coverages, like business interruption insurance, general liability and key person insurance.

To learn more about cyber insurance and to get a quote, call us at 813-689-8878.