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Cyber: Dangerous Third Party Policies

Understanding Third Party Cyber Coverage Parts

Cyber Liability remains one of America’s most uninsured and underinsured exposures. An even more alarming problem is that those who have purchased insurance are grossly underinsured.

Cyber Liability has three main coverage components for the non-technology risk. These three coverage parts, which should be included on every Cyber policy, are Media Liability, Network Security and Privacy Liability, and Regulatory Liability.

While many of today’s policies, endorsements to package policies, and coverage parts combined with management liability policies do have these coverage parts, they vary in the scope of coverage provided, and the limits of coverage afforded.

For example, Media Liability coverage parts should extend to both electronic and printed materials of the Insured. Does your current policy provide this?

The biggest problem we see is that the limits provided by an Insured’s current carrier is grossly underinsured. We recommend $1,000,000 limit of liability for any of the above coverages.


Understanding First Party Costs Cyber Coverage Parts

The other and far more important coverage parts to insure in your Cyber Liability program is the First Party Costs incurred by the Insured.

The most well known of these expenses are Notification Costs, which are the costs paid by the Insured to notify its customers who have been breached. However, there are many more coverage parts and the importance of these being included is huge. 90% of every dollar spent on a Cyber claim comes from the payment of these costs.

Coverage parts included are Notification Costs, Customer Support and Credit Monitoring, Legal and Forensic Expenses, Crisis Management Expenses, Business Interruption, Loss of Data/Data Restoration, Cyber Extortion and Cyber Terrorism.

Each of these present a unique set of exposures the Insured faces every day. Today’ average Cyber claim is $190,000. An uninsured or underinsured risk can have an expensive price to pay for that decision. What does your client’s policy include?

Want to be sure you have the right coverage? Have clients who have no coverage? Let us provide you with terms today from America’s top writers of this line of business.

Simply email me today at for your Cyber quotes!