Some of the challenges faced by insurers are:
A comparison with, for instance, vehicle insurance will perhaps illustrate the insurance challenge – vehicle insurance provides clear information on the manufacturer, model or series, engine specifications as well as colour, just to mention only a few aspects to uniquely identify the asset.
Likewise, the nature of the insured risk can be priced with relative accuracy. In the event of a vehicle claim, a loss adjuster will perform a standard evaluation. Should it then become evident that, for instance, the vehicle’s engine, the actual model, and colour has changed since the cover was incepted, a claim would simply not be entertained, for obvious reasons.
When underwriting an insurance policy for an industry as fluid as information security, it becomes almost impossible, because, even by the time the cyber insurance policy is issued, the insured “asset” (the data or information) has in all probability already changed. This creates enormous challenges for insurance companies to price the risk in such a way as not to incur significant underwriting losses.
A presentation by KnowBe4 has revealed that the majority of all malicious digital breaches are due to social engineering and phishing followed by breaches as a result of unpatched software.
An effective risk management strategy would therefore be to focus on preventative measures (risk avoidance) in areas where cyber risks originate.
Summary and Conclusion:
A universal caveat in all cyber insurance policies is the onus on a client to have continuous protective measures in place as failure to do so will invalidate cover. Compliance is however possible with the prior deployment of advanced technology and systems to monitor threats in real-time. The product provider must, furthermore, back up his conviction by offering a FREE Cyber Warranty in case of a breach, regardless of whether such breach happened when connected to the corporate network or not.
Providers like Thuthukani Technology Solutions will provide protection wherever the client is, on or off the corporate network. Thuthukani Technology Solutions includes FREE Cyber Warranties with their solutions and provides assurance that clients have a quality cybersecurity product.
In conclusion, rather than trying to seek relief through an insurance policy in the event of a breach, prevent the breach with the assistance of a provider that stands behind its promise!