Cyber Liability Insurance Guarantee ~ Insurance Academy

Most organizations face increasingly complex information and computer security risks. This is especially the case in Asia, where technological progress and adoption are often more advanced than other regions of the world. The ever-expanding breadth of threats, litigation and regulation has broadened the spectrum of risk and deepened the potential losses that companies face in their day-to-day operations.

The potential for this risk to cause economic loss and reputational damage is very real. Case studies prove that this is often the case throughout Asia.

Gaps in Traditional Insurance
The rapid evolution of computer privacy and security risks has meant that traditional forms of insurance are no longer able to adequately respond to these exposures.

General Liability Policy often does not provide protection against damage to electronic data, criminal or willful acts by the insured or his employees, or pre-claim costs (eg notification fees and defense fees).

Property Insurance Policy usually limit coverage against damage/loss of use of tangible physical property resulting from physical harm and damage to tangible property only in certain locations: some insurance companies expressly exclude coverage for any damage to data.

Fidelity Insurance / Crime Insurance Policy generally limits coverage against direct loss from the theft of money, securities, or other tangible property by employees. Even coverage extended by computer crime expansion limits coverage to the costs of recovering lost data or recovering damaged or corrupted data — often these policies will explicitly exclude coverage for actual theft of data or information.

Errors & Omission Policy often limits coverage for claims arising from negligence in performing specifically specified services and excludes coverage for criminal or willful acts of the insured or his employees and pre-claim costs associated with breach of privacy (i.e., notification and legal defense fees).

Computer Privacy and Security Insurance: Filling the Gap in Traditional Insurance
Privacy and Computer Security Insurance (Privacy & Computer Security Insurance) can fill many gaps in traditional insurance, as well as provide protection against direct loss and liability for the risks created by the use of technology and data in your company’s day-to-day operations.
This insurance policy is flexible, allowing for a customized program to provide coverage for the following major exposures.

Privacy & Security Liability

Protection for claims arising from actual or suspected computer security failures to prevent or mitigate computer attacks
Protection for claims arising from disclosure or mishandling of confidential information
The guarantee applies not only to electronic information but also to printed information
Warranties include cover for the entity for intentional employee actions
Vicarous liability for privacy violations caused by third party vendors or outsourcing companies related to business processes
Coverage for costs associated with complying with privacy infringement notification laws, including legal and forensic fees
Guarantees for defense of legal defense actions including affirmative coverage for fines and penalties

Information Asset Coverage

Reimbursement of actual costs and costs required to restore or restore organizational information and computer system assets damaged or corrupted by a computer attack

Business Interruption Guarantee including Extra Expense
Reimbursement for lost revenue includes additional costs resulting from a technology failure, computer system outage, or computer attack

Cyber Crime Guarantee

Difference-in-Condition (DIC) coverage fills gaps for “data/information theft” in crime policies as well as redress for theft of information or computer system assets
Coverage can be an advantage of a computer crime policy

Cyber Extortion Guarantee

Pay ransom or investigative fees related to threats to release, leak, disseminate, destroy, steal or use confidential information; inserting malicious code into computer systems; damage, or destroy computer systems; or restrict or block access to computer systems

Guaranteed Reward Fund Coverage
Criminal reward funds for information leading to the arrest and conviction of any individual who commits or attempts to commit any illegal act related to coverage under the policy

Cisis Management Guarantee
Funds for public relations and crisis management in connection with any crisis event related to a computer security failure or privacy violation resulting in a loss or a claim covered under the policy

Credit picture: The AIA Trust