Industry Magazine Grand General Agency Fall 2016 | Page 26

CYBER LIABILIT Y COVERAGE

CYBER LIABILITY COVERAGE:
If Not Now, When?

INSURANCE professionals working
in the commercial lines market are
certainly aware that every customer
and prospective customer is susceptible
to cyber liability. Every business that
is connected to the internet, even if
only for a short time, can have its data
breached and sensitive information
exposed. The resulting costs for
regulatory compliance, lawsuits, and loss
of customers can easily put the small to
midsize client out of business.
If this risk is so prevalent, why have
over 95 percent of small businesses
not added cyber liability coverage to
their portfolio of policies? Why would
a business owner, after learning of
businesses across the country being
victimized by hackers, not run to an
insurance broker and put this coverage in
place? In a word, education.

Educate En Masse
Believe it or not, cyber liability is still
a new product. Most carriers are still
learning how to underwrite and rate their
products. Certainly, brokers continue
to learn the subtle nuances of one form
or another, and lawyers are working to
understand the different regulatory
requirements
among
the
states.
Education is the key to getting the “95
percent” off the fence and into a product
they so genuinely need.
Brokers should start with workshops
for clients and prospective clients. Get
as many business owners and managers
as possible in a room and conduct a
workshop that provides case studies
that will help clients understand the

FALL 2016

incredible need for coverage. Trade
associations and chambers-of-commerce
are always in need of a speaker or
sponsor for meetings and trade shows.
The information is out there, and you
should have no problem alerting your
audience to the need for coverage.

Educate One-On-One
Speak with each current and
prospective client about the risk of a
data breach and the resulting financial
hit that may result. Explain that storing
information in the cloud and relying on
its POS vendor being PCI compliant is no
substitute for cyber liability insurance.
If your current clients do not have an
incident response plan in place for a
data breach, provide the resources they
need to understand its need and how to
implement one. You should emphasize the
role of an experienced claims team and
breach coach as part of this plan.

Emphasize The Value-Added
Services
Many cyber liability policies include prebreach assistance and risk management
tools. They may also provide coverages
that are not offered by every carrier. For
example, the insurer USLI offers cyber
liability policies that include discounted
background checks of employees, a free
human resource hotline, a free workers’
compensation hotline, and other tools
through its Business Resource Center.

Offer Options with the Presentation
Since most carriers have different

cyber liability products with different
pricing, find the best three to present to
your clients so they will feel the