Data breach coverage provides you with access to professionals who can help you comply with regulatory requirements, provide guidance on how to help prevent a data breach and handle a breach crisis if one occurs. Response expense coverage can help to quickly restore confidence in your business or practice through notification to impacted individuals and can help pay for good faith advertising expenses, for example. In most states, coverage is also available for defense and liability expenses in the event you’re sued because of a breach.
Specialized policies to protect against online attacks are offered by about 50 carriers, including big names like the American International Group, Chubb and Ace, according to the New York Times. As data breaches have become a reality of the business world, more companies are buying policies, yet companies say it is difficult to get as much coverage as they need, leaving them vulnerable to uncertain losses.
When sensitive and personal data are exposed, your reputation is on the line.
The insurance industry traditionally quick to market new products to meet new perils did not keep up with threats and their evolution. Cyber threats have been around for more than 30 years, but the first cyber insurance policy, which was for businesses, wasn’t issued until 2008.
Individual cyber insurance protection is just a newborn. It is only now starting to reach the market. But cyber insurance for individuals falls primarily into two categories, the largely unregulated identity theft and monitoring services, and endorsements for homeowners and renters policies. Standalone cyber insurance for individuals is still virtually non-existent. The benefits on cyber security endorsements are very limited in their scope, including $50 in credit card losses and $200 from bank accounts.
The main problem for that type of insurance would be quantifying the losses from attacks, because they are usually intangible.