CYBER INSURANCE
I
n recent years the number of high
profile data breach events has been on
the rise. This has created awareness
in the general public for the need of
Cyber Insurance. With many carriers
now willing to offer some form of Cyber
Insurance, insureds have more options to
choose from.
When evaluating options from competing
insurance carriers it is essential that
insureds examine the insuring agreements
being offered to them. Cyber Insurance is
typically written on non-standard forms
that can and will vary greatly from carrier
to carrier. The objective in selecting the
appropriate Cyber Insurance Policy should
be to obtain the most robust coverage
options at a premium that is acceptable to
the organization.
• REGULATORY FINES AND
PENALTIES – This will provide
coverage for fines and penalties levied
against you for failure to comply with
federal or state guidelines regarding
cyber security. • MEDIA LIABILITY – This will
provide coverage for your liability for
infringement on copyrighted material
on your website. • NOTIFICATIONS COSTS – This will
provide coverage for the costs you
incur to notify affected individuals
after a data breach. Depending on the
number of affected individuals and
the method of notification this can be
quite costly. It is important to realize that not all Cyber
Insurance policies provide the same level of
protection and that coverages can and will
vary greatly from carrier to carrier. When
evaluating your options, it is important
to consider each of the aforementioned
insuring agreements.
• CREDIT MONITORING – This will
provide coverage for the cost of credit
monitoring services that you might
be required to provide to affected
individuals following a data breach. • CYBER EXTORTION – This will
provide coverage for situations in
which cyber criminals take over
your computer system and hold it at
ransom. Having a strong cyber security and
overall risk management program at your
organization is the best way to defend
yourself from cyber criminals. Despite
the best efforts of many organizations,
they still fall victim to cyber criminals. A
comprehensive Cyber Insurance Policy can
provide the protection your organization
needs in this event. +
• SOCIAL ENGINEERING – This will
provide coverage for situations in
which an employee is tricked into
doing something via social media or
fraudulent emails.
The following insuring agreements should
be present in your Cyber Insurance Policy:
•
•
DATA BREACH – This will provide
coverage for your liability when
the personally identifiable data of
your clients or employees has been
compromised.
NETWORK SECURITY – This will
provide coverage for your liability
when you inadvertently spread a virus
or malicious code to your clients or
vendors and their computer systems
are compromised as a result.
• COMPUTER FRAUD – This will
provide coverage for situations in
which cyber criminals gain access to
your bank accounts and transfer funds
into their own accounts.
• CRISIS MANAGEMENT – This will
provide coverage for the cost of
engaging a public relations firm to help
you deal with the negative publicity
you incur following a data breach.
Joe Haggerty is the Director of Client Services for Hardenbergh Insurance Group. Hardenbergh Insurance
Group is headquartered in Marlton, NJ, and serves clients throughout the country with a particular focus
on those domiciled in the states of NJ, PA, DE, NY, and MD. At Hardenbergh Insurance Group, Joe is
responsible for their Risk Management Consulting Practice which includes implementing client specific
risk management programs with the ultimate goal of reducing total cost of risk for commercial lines
clients and increasing agency retention.
Prior to joining Hardenbergh Insurance Group, Joe held the position of Vice President and Commercial
Lines Underwriting and Marketing Manager for Univest Insurance. Prior to that, Joe managed a diverse
book of commercial lines accounts for Arthur J. Gallagher Risk Management Services.
Joe has a degree in Risk Management and Insurance and International Business Administration from
Temple University. In addition to this, Joe has received the professional designations of Chartered
Property Casualty Underwriter (CPCU), Associate in Risk Management (ARM), Certified Risk Manager
(CRM), Certified Insurance Counselor (CIC), and Certified Insurance Services Representative (CISR). Joe
has been a CIC since 2011 and a CRM since 2017. Joe is a member of the National Claims Counsel for
Liberty Mutual Insurance Company and has been the East Coast Chair since 2017.
BY: JOSEPH J. HAGGERTY,
CPCU, ARM, CRM, CIC, CISR
7