The Expert Podcast

Here's a good example of where there are differences in coverages between business insurance, liability insurance, crime insurance, and cyber liability insurance. There's an article from Business Insurance magazine where Traveler's Insurance paid a claim of phishing, which is a misrepresentation by a fraudster trying to get access to a computer. The company lost $600,000, as you see at the bottom of the article. Traveler's Insurance paid the claim under its crime policy, not a cyber insurance policy. They refused to pay under the computer fraud coverage, which is also not cyber liability insurance. That's another type of fraud coverage. The problem is that the coverage they refused had much higher limits, so they would have received more money.

In March, an undefined bad actor emailed fraudulent invoices, said to be from a vendor, to the purchasing manager for $600,000. The company paid it, and they lost the money. This may have been a coverage that could have been afforded under cyber liability insurance or other types of coverages.

So, it's a good example of where, as you're putting together coverages for your company, make sure that you have no gaps—no loose ends—or at least, if you do, you know where they are. If you don't want every last insurance policy in the world, that's okay, as long as you know where your risks still exist and if you're willing to accept that risk.

Sometimes, a cyber liability insurance policy is a stand-alone policy, separate from your other business insurance. It may fill in some of the gaps, overlap some insurance, or add additional coverages. But just make sure that as you're putting together the different policies for your enterprise, you understand what's in them and how they cover different types of risk, and what they don't cover. Be aware of the exclusions from coverage, and if you have exclusions you're not willing to live with, consider getting endorsements or additional policies that fill in those gaps.