What Isn't Covered by Cyber Insurance?

What are common exclusions in a Cyber Insurance policy?

In the last few years, Cyber Insurance policies have been on the rise as businesses are now under the constant threat of hackers and other cyber attacks on their databases. As a business owner, it's important to be aware of the insurance product you're buying to understand what is excluded and if your policy will be a good fit for your business. All insurance policies have types of exclusions and since Cyber Insurance is relatively new and every business has different needs, we know that asserting what is not covered by a Cyber Insurance policy can sometimes be difficult. That's why, in this blog, we'll breakdown and explain common types of exclusions in Cyber Insurance policies.

Common Cyber Insurance Exclusions

Patent, Copyright Infringement and Software

These are covered by Intellectual Property Insurance policies and not covered under Cyber Insurance. However, in some cases, a detailed cyber policy can cover some defence costs from copyright infringement claims. These claims should only be a result of actions carried out by a third party and non-management employees. It's best to speak to your licensed broker to see if your cyber policy provides this coverage.

Wars and Invasions

Your cyber policy will typically exclude damages resulting from war, invasions or insurrections.

Failure in Security Measures

Even if you have Cyber Insurance, you still need to be proactive and take all the necessary precautions with your business' cybersecurity. When an organization puts in a claim for their Cyber Insurance policy, it will be questioned regarding its due diligence and the steps taken to safeguard their data. If the insurer finds that the firm had failed to implement any security measures, the organization may have its claim denied. Although not all policies will have this exclusion, it is something that should be considered.

Bodily Injury and Damage

If a business database is breached and a person is physically injured, it does not mean that the person was directly injured because of the breach; therefore, this claim is excluded. In this case, your Commercial General Liability policy would be better to refer to.

Loss of Electronic Device

If a company employee loses a company-issued portable electronic device, it is typically not covered under Cyber Insurance.

Government Entity or Public Authority

Any recommendations or orders from a government entity or public authority are excluded in Cyber Insurance policies.

Review with a Broker

Every insurance company has its own wording and exclusions. Always ask your broker about the exclusions in your insurance policy as these could negatively impact your business when trying to process a claim. It is also critical that all companies obtain and carry out continuous security measures to protect their data.

It's essential to confirm with your insurance provider about the exclusions on your Cyber Insurance policy; like most things in life, it's better to be proactive sooner than later! Our Foxquilt team of experts can help you with any questions that you may have regarding insuring your business with a Cyber Insurance policy. We can help you find an insurance policy that's tailored to your unique business needs. Get your quote today.