The Expert Podcast

• Everyone has various types of insurance: auto, health, homeowners, premises liability, general liability, etc. These protect us financially from unlikely events like accidents, property damage, or lawsuits.
• There is a newer, very important type of insurance especially for corporations—and increasingly individuals—that didn’t really exist several years ago: cyber liability insurance.
• Many people and even insurance agents may have never had or written a cyber liability policy before. It’s a new and emerging area of insurance.
• Cyber liability insurance covers risks such as:
  • Security breaches and deleted data
  • Ransomware attacks
  • Unauthorized access to customer files
  • Various types of hacks and cybercrimes
• In the past, some business policies had endorsements for cyber risks, but they offered limited coverage and many exclusions.
• Today, cyber insurance can be a standalone policy or an endorsement to a general liability policy. Early adopters benefit from more than just coverage—they gain access to a specialized and increasingly difficult-to-enter market.
• The cyber insurance market is currently "hardening":
  • Some insurers are withdrawing or raising rates.
  • Pricing was based on past low-loss data, but recent years have seen a dramatic rise in cyber losses.
  • The increase is driven by more sophisticated attacks and lack of required security measures in many policies.
• Cyber insurance market growth:
  • Estimated $7 billion in premiums in 2020
  • Projected to reach over $20 billion by 2023-2024 due to rising demand
• Real-world comparison:
  • Fire damage: Physical losses are often easier to recover from due to backup systems, business interruption coverage, and replacement options.
  • Cyber attack: Data loss, ransomware, and exposure of private client information can halt business for months, cause massive financial damage, and legal liabilities.
• Cyber insurance helps cover:
  • Income loss during business interruptions
  • Recovery of damaged or deleted data
  • Legal claims from clients or customers affected by data breaches
• Importance of buying cyber insurance before any breach or loss:
  • Policies require disclosure of past incidents.
  • Failure to disclose can void coverage.
  • Early purchase helps secure reasonable premiums and full protection.
• Cyber threats have evolved from accidental losses (e.g., lost laptops) to active, sophisticated attacks (phishing, social engineering, hacking).
• Cyber insurers provide guidelines and best practices to help businesses prevent attacks, which can also improve operational efficiency.
• By being insured, businesses benefit from shared knowledge and data from insurers who analyze trends and help prevent losses before they happen.
• Even with insurance, breaches are inconvenient and costly events, often with deductibles and possible coverage limits.
• Future episodes will explore specific policy coverages, terms, and how cyber insurance contracts work.