The first insurance product related to cybercrime was developed in 1997 and protected against the hacking of websites. Since then, things have gotten more complex. Today there are many more ways to cause harm through the Internet and the consequences are more wide-ranging, including expensive violations of state and federal privacy law, theft of trade secrets, and the total shutdown of a business as evidenced by the recent hacking into Sony Pictures’ network systems. Not only are large corporations like Sony Pictures, Home Depot, and Target vulnerable; small firms that conduct business through the Internet and store sensitive client information on networks are vulnerable, too, such as law firms that collect personal information about clients for billing purposes.

The following 10 tips will help you start an important conversation between your firm and Narver Insurance to craft a comprehensive cyber-liability insurance policy to protect the assets your company has worked hard for.

Ask for retroactive coverage. Your firm needs to have coverage for a breach that occurred before you were aware it happened. Retroactive coverage insures prior unknown events that result in claims or expenses during the policy period. Think Target or Home Depot, neither of which knew that they were breached until many months after the event occurred. Retroactive coverage can be negotiated for one, two, five or 10-year periods and some insurers offer unlimited coverage. Be aware that some insurers do not offer this coverage.
Review the limits and sublimit clauses in the policy to ensure that they are adequate for your firm’s needs. Pay attention especially to the limits for crisis management and regulatory action expenses such as fines for state and federal privacy act violations.
Third Party coverage is essential. Does it include an Errors & […]