The Expert Podcast

So what is the difference between cyber insurance and cybersecurity ? Forbes had a really good article about that exact subject And we get into this . Every single day because we own both a cyber insurance agency and also a licensed investigative agency So we deal with both the security and the insurance First let's look at what the article says It says cyber insurance protect an organization against financial losses . Following attack . Cyber security . Focuses on protecting data software and hardware . And preventing the attack from happening in the first place . Different outlooks mean that traditionally cyber insurance and cyber security were separate . Propositions . Because the underwriting of insurance was treated much like other lines of commercial insurance . The focus was tallying up losses . And determining which industry . The organization fits into that's called underwriting . So when you go to get insurance in the traditional type of insurance they say , what kind of business are you How big are you How many employees , this is what we expect for losses Here's your rate Here's your premium . For cyber they started doing things the same way . However smart insurance companies now Our writing cyber insurance coverage in a different way They're looking at it more holistically . So if you're talking to your agent or your broker , About cyber coverage . Ask them what means testing ? Or what strategy they use . To create their market . For cyber insurance because if it's written under a traditional market the rates might be too high They might be too low . You want to have a cyber insurance company ? That is starting with a clean sheet of paper . Because the majority . Of cyber insurance . Underwriting comes from . A risk-based approach not a loss based approach . Another industry has done this for many years and that's the real estate title insurance industry . Look , when you buy real estate title insurance on a transaction you buy a house you get title insurance . They don't expect to have many claims In fact The claims rate for . Real estate title insurance is like two or 3% of premiums . They put a lot of their money into prevention They run title searches they do title abstracting . They get a title opinion . They do a lot of prevention upfront from having title claims . To keep it from happening in the first place So there . Their rates are low In fact , the good thing about real estate title insurance is it's not an annual premium You buy title insurance one time . And that premium is good for as long as you own the property Cyber insurance . In the new marketplace is being underwritten in much the same way . They're going to look at the risk of your company not the risk of your industry in general or what their loss runs are Or what their claims experiences . They're going to look at your particular company In fact , Many of the Modern progressive insurance companies When you submit for a quote they're going to scan . Your system they're going to check your domain name . Your website . Your company information . And they're going to get a profile pretty quick of what level of risk your company is not because it's in a certain industry or , or SIC code or demographic area . They're going to look at your particular company In fact , they may actually get your IP addresses and do scans to know how much of a risk is your company . In fact in addition to that They're going to . Put certain protocols on your policy requiring you to do certain things have multi-factor authentication So you can't just log in with a password . You have to have a code . Sent to your phone , like you do for your bank . They may require you to have a monthly updates to patches on firewalls and modems . They maybe require you to have , access for their underwriting . To ping or pen test your system . That's a good thing . Because if your insurance company is writing your policy based on your particular risk you're not going to get lumped in . Would it a bunch of jamoke and other companies that really don't know what they're doing . So the newer cyber insurance companies are coming at it from a whole different ball game . They're not like the legacy old school insurance companies that look , those companies know how to write things like fire . Commercial auto physical damage errors and emissions all the traditional types of insurance because their losses are based on industries . Cyber is based on a particular company risk . If you are at this moment , thinking about cyber insurance . You are probably at the cutting edge . Of . Cyber awareness . Most companies aren't even asking about this yet . Most companies don't even think they need it yet . If it's at least on your mind , you probably are already wondering what should I be doing How can I prevent it ? You probably already have some fear about having a cyber loss which you don't want to have . So you probably already taking some actions That's a good thing . That's going to put you at . The more limited risk end of that . Curve Still . Before you start doing underwriting or applications we recommend . Getting a list of best practices You can get it from our website risk coverage.com . What are the best practices to put in place in your company ? Before . You start applying for insurance because if the insurance carrier the underwriter can see . That you as a company I have already put some procedures in place . They know that you take it seriously . And the things that they add on . For recommendations or even requirements Are going to just . Stack above what you already are doing The other clue . To how well your carrier is Has to do with how they take your information . Are they giving you a piece of paper Do you have to fill out and hand write an application ? Or is it done electronically Many companies in the past I'm sure when you did your renewal or new insurance for your company , You filled out a form an application form Maybe it was a PDF file online . But . The more modern progressive insurance companies for cyber . Are taking all this information electronically you're typing it into . A website We even have a portal and you can check it on our website where you can do it . Verbally , you can do it by voice . You can call a number You can speak into the voice system to answer the questions at the prompts and it can . Come up with a quote based on that . Cyber is a big deal . Right now five to 10% of companies are looking for it We expect over the next two or three years it's going to jump over 50% of companies . As you see two things happen . More claims and more events happening that people that you know in business or maybe even your own business and also . And more stabilization of rates . You know rates have been jumping around a lot They were low then they jumped high Now they're backing off Once rates get into a range where . It's easy to have a policy with a stabilized rate that you can count on . More companies will be adding cyber liability coverage . To their layers of protection They have look you probably have a umbrella policy commercial umbrella . You probably have other types of coverages that are layered on top of each other . Why not add cyber . For a typical don't quote , exact amount for your company . Because you want to get it specific but most medium to small sized companies with a decent model employees in a non . Dangerous . Industry that have regular protocols . You can get a cyber policy for a thousand bucks 1500 bucks a year . In most cases maybe a little more if you have a higher employee count But it's not going to be a ton It's not going to be 10,000 . Not gonna be 20,000 , unless you're fortune 500 company . Or you have high risks . Again this is not designed to be a price quote which is designed to give you an idea of what these policies costs . You can find out almost instantly on our website type in four or five . Piece of information hit enter . And you can find out exactly what it would be , whether you get it from us or somebody else . You have questions about cyber coverage You can reach us at our website risk coverage . Dot com or you can . contact us through email or our phone .