It may be inexpensive and have the words “cyber policy” in its name, but not all coverages are created equal and
CFC Underwriting is warning brokers about castles made of sand.
Ensuring your client is appropriately covered means not getting duped by products marketed to the price-conscious consumer, Lindsey Nelson, international cyber team leader at CFC Underwriting advised.
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“We do see a lot of cyber-light endorsements in the market that are at very competitive pricing, very aggressive pricing, very little coverage,” Nelson said.
“It’s not doing clients too much of a favour when adding that on because it’s not the proper coverage. You’re better off looking at a full, rounded coverage that will actually respond in the event of an incident.”
Most targets of a cyber-attack aren’t the global conglomerates, Nelson, said and small to medium sized businesses were often subjects of a hack.
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“Ninety per cent of the attacks that we’ve seen have been on companies with less than $50 million in revenue. They’re definitely more of a target because they don’t have the proper or sophisticated controls you’d see in larger companies,” Nelson said.
“Because it’s (cyber insurance) not always contractually required, and it’s certainly not required by any legislation that’s in place at the moment in most places in Canada, it (cyber insurance) is more of a ‘nice to have’ than a ‘need to have’ at this point. This is why we need to come in and educate both brokers and clients as to why it would be relevant to them.”
But that doesn’t mean brokers or insurers should treat small or mid-level players the same as behemoths, Nelson explained.
“What we don’t want to do is take examples like Yahoo and sell them to enterprise companies as though it was comparable,” he advised.
“But what you can do is go to Canadian companies, or smaller, mid-market companies who don’t have these controls in place like Yahoo did, and say when you do suffer a loss like this it’s going to be detrimental for your businesses: so it does open up that conversation.”
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