For many firms, cyber liability insurance provides critical protection from financial loss stemming from a cyber incident, from legal damages and business interruption, to crisis management and investigation expenses. But as it's a relatively new, evolving, and very specialized type of insurance, businesses must exercise due diligence when shopping around for a new policy or looking to renew their cyber insurance coverage.
Chetan Sehgal, Partner, Forensic Disputes & Investigations, has five practical pointers for leaders looking into choosing a cyber insurance policy.
Conduct a cyber risk assessment before buying.
Hidden vulnerabilities typically come to light only after a successful attack. Conduct a risk assessment of your control environment and develop a prevention program—or work with a firm that can—to purchase the most appropriate plan for your needs. A cybersecurity and forensics partner like BDO can also conduct a cost-benefit analysis to identify your blind spots so you can focus your insurance coverage on those areas, or, better yet, remove those blind spots prior to applying for insurance to avoid denial of coverage or high premiums.
Understand cyber insurance coverage and exclusions.
Work with your insurance broker or underwriter to ensure the policy fits your type of business and that you're fully aware of what's covered—but more importantly, what isn't covered.
Select a cyber incident response team you trust.
Review and understand the fine print in your cyber insurance policy.
Insurance policies aren't created equal, and for cyber insurance, many buyers aren't fully aware of the pitfalls associated with these policies.
Implement a comprehensive suite of cybersecurity controls and protections.
Reactive and proactive cybersecurity measures working together
Above all, business leaders must not lose sight of the fact that cyber liability insurance is a reactive solution and does not prevent an attack from happening. That's a serious gap—because loss from cyber crime isn't just financial; it brings disruption to organization's culture, operation, and reputation.
That means insurance is only one piece of the cybersecurity stronghold.
Businesses that double down on developing a well-designed business network defense strategy, securing their endpoints, and launching proactive detection and response mechanisms are better primed to recover with minimal damage.
How BDO can help you understand your cyber insurance needs
From quantifying the post-incident losses to proactively helping you understand the appropriate level of cyber liability coverage, BDO can support your business throughout the insurance cycle.
We often get retained to deal with post-incident response, but our counsel doesn't stop there. Our cybersecurity and digital forensics team can help fortify your organization using proactive tactics that include focusing on employee awareness and training, conducting due diligence on your company's preventive controls, and quantifying risk to help you ensure the cyber insurance policy you choose meets your needs.
The value of working with BDO on your cyber insurance includes:
Connect with Chetan Sehgal, our Forensic Disputes & Investigations Partner, to assess your online environment, understand your potential exposure, and set up the right controls, as well as your cyber liability coverage, to defend against cyber threats.