What Does Cyber Insurance Not Cover?
Understanding the limitations of cyber insurance is crucial for businesses to make informed decisions. We've gathered insights from five industry professionals, including co-founders and business development executives, to shed light on what cyber insurance does not cover. From exclusions of social engineering attacks to intentional acts not being covered, discover the top 5 aspects that are often left out of cyber insurance policies.
- Excludes Social Engineering Attacks
- Security Reputation Not Covered
- Physical Damage Not Covered
- Property Loss Exclusion
- Intentional Acts Not Covered
Excludes Social Engineering Attacks
While cyber insurance policies have become an indispensable part of an organization's security framework, it is important to note that they do not provide complete protection against all types of cyber threats.
Social engineering attacks, where hackers manipulate users to obtain sensitive information or privileged access, are one such example. Despite being a major source of data breaches, cyber insurance often excludes coverage for these attacks, as they are difficult to defend against and involve human error.
Thus, organizations should complement their cyber insurance policies with effective security awareness training and incident response plans to mitigate the risks posed by social engineering attacks.
Jefferson McCall
Co-founder and HR Head, TechBullish
Security Reputation Not Covered
Especially for software and tech-forward businesses, there is no substitute for a good security reputation with your customers. Cybersecurity insurance aims to make a company whole for a specific attack. That said, customers want their data to be safe no matter where it is. Even if they trust the solution, you'll want to reassure them and try your best to keep them from looking at other providers.
Trevor Ewen
COO, QBench
Physical Damage Not Covered
Cyber insurance protects businesses against financial losses caused by cyber-attacks. However, it does not cover physical damage caused by cyber-attacks.
This means that if a cyber attack results in physical damage to the business premises, such as a fire or explosion, the costs of repairs or replacement will not be covered by cyber insurance. Businesses need to ensure they have adequate insurance coverage for both cyber and physical risks to fully protect themselves against losses.
Tarun Saha
Co-founder and CEO, StallionZo
Property Loss Exclusion
Monitor your laptop, as cyber insurance doesn't cover loss of property, and many companies don't even consider it a potential case. However, this can be problematic since a company laptop with all the company logins and data can become a dangerous weapon in the hands of a competitor. Fortunately, commercial property insurance offers a solution to this type of threat.
Marco Genaro Palma
Co-founder, TechNews180
Intentional Acts Not Covered
While cyber insurance policies can vary in their coverage and exclusions, one thing that many policies do not cover is intentional or criminal acts committed by the policyholder or their employees. This means that if the policyholder or one of their employees intentionally causes a data breach or engages in cybercrime, the insurance policy may not cover the resulting damages or losses.
Additionally, some cyber insurance policies may have exclusions for certain types of cyber threats, such as attacks carried out by nation-state actors or losses resulting from social engineering scams. It is important to carefully review the terms and exclusions of a cyber insurance policy to understand exactly what is and isn't covered.
Taran Sidhu
Business Development Executive, Insurance Support World
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