Insurance for Professionals

Transcription

1 Insurance for Professionals Adam E. Gwaltney, Agent,

2 Cyber Liability Insurance Managing Cyber and Crime Risks Through Insurance

3 Presented by: Adam E. Gwaltney, Agent Specializing in Professional Liability Insurance, Inc. Adam E. Gwaltney, Agent,

4 ALTA Best Practices That Apply #3 Adopt and maintain a written privacy and information security program to protect Non-public Personal Information (NPI or PII) as required by local, state and federal law. ** NOWHERE in Best Practice #3 is it stated that insurance should part of your program. However, is it implied? A Cyber loss can be the single most catastrophic loss facing your agency. The loss of data or of securities can be the result of Cyber theft

5 ALTA Best Practices That Apply #6 Maintain appropriate professional liability insurance and fidelity coverage. Professional liability (E & O ) to protect your professional errors Fidelity (coverage for theft) can also be referred to as Crime So why doesn t ALTA specifically address Cyber Insurance as they do E & O and Fidelity?

6 #2 Escrow Trust Accounts #3 Information Security #6 Errors & Omissions Insurance

7 Two Main Questions #1 What do the bad guys want? Money and Information #2 How do I insure the risk? Crime Insurance AND Cyber Liability Insurance

8 Finding Coverage

9 Partial Coverage for the Risks 1. Business Owners you can only endorse, limited coverage, will only cover nominal loss, not designed for a true breach or theft 2. E & O very few carriers even offer endorsements, limited scope, not recommended as coverage is limited and is not designed for a true breach or theft 3. ESB limited scope of coverage, low limits, used as a stop gap measure

10 How do I Insure the Risks - Crime Crime Insurance Protects money and securities. Employee Theft (FIDELITY) Forgery or Alteration Inside the Premises - theft of money and securities Inside the Premises - robbery or Safe burglary of other property Outside the Premises Computer Fraud Funds Transfer Fraud Money Orders and Counterfeit money

11 Crime Insurance o Designed to cover money AND securities NOT data OR information! o Social Engineering Fraud the fraudulent /internet/telephone burglar o Can purchase high limits of coverage o You can tailor the policy to your agency s needs o Loss payee endorsements can be added to cover your underwriter(s) o Very broad coverage form as compared to the ESB o Premiums can be substantially lower than those of the ESB

12 How do I Insure the Risks Cyber Liability Cyber liability Insurance Protects Information and Data o Policy affords coverage in two sections: o First Party losses that directly affect the insured o Third Party losses arising from a breach but originating from a third party *SOME Cyber Liability policies are adding Social Engineering coverage for additional premium this covers MONEY currently very expensive

13 Cyber Liability Insurance 1 st Party Will cover costs incurred by the insured (You): o Breach notification/response expenses o Public relations o Forensic consultants/investigation o Credit monitoring o Cyber extortion o Business interruption/extra expense o Loss of actual data-system restoration o PCI (Payment Card Industry) fines and penalties * First party coverage is the lynch pin of coverage and is generally UNDERINSURED!

14 Cyber Liability Insurance 3 rd Party Will cover claim expenses and damages you are legally obligated to pay as a result: o A network security breach o Loss of private information privacy liability o Regulatory actions or proceedings, penalties o Website media content *Third party coverage is generally offered in higher limits as compared to first party and is the lesser of the two risks monetarily speaking.

15 Misconceptions in the Market Crime o My Fidelity Bond covers my crime risk does it really? o Crime insurance is unavailable to the title industry - WRONG o My underwriter requires a loss payee provision on my Fidelity Bond Crime can allow for this too! o It s very expensive- WRONG in most cases, the crime insurance policy is LESS expensive than a Fidelity Bond o Protects from internal and external risks o Protects escrow and operating accounts

16 Misconceptions in the Market Cyber o Coverage is expensive (compared to ESB, Crime, E & O v. overall monetary risk) o No markets for title industry actually dozens of markets are open to title industry o Cookie cutter policies can expose your company! o I have my other insurance policies endorsed and that s all I need WRONG o My Best Practice security is in place therefore I do not need Cyber Insurance - - a cyber crime can be the most catastrophic loss facing your agency o It s the Third Party lawsuit that s going to bankrupt me NOT TRUE! First Party losses can bankrupt you o Public relations won t help after a data loss breach coach can be critical at the onset

17 Summary for Cyber and Crime o Both Cyber Liability and Crime Insurance policies should be carried by all title agencies o They actually work in tandem o Cyber will protect data and Crime will protect money, both from internal and external risks o Many experts predict that a full, stand alone Cyber Liability policy will soon become one of the top three insurance policies in any business insurance portfolio o Policy endorsements for cyber and crime simply do not cover your risk properly o Stand alone policies are recommended

18 Disclaimer This information is written from an insurance perspective and is meant to be used for informational purposes only. It is not the intent to provide legal advice, or advice for specific fact, situation or circumstance. Contact legal counsel for specific advice.

19 Adam E. Gwaltney, Agent, Inc. Noblesville, Indiana ext. 103 Licensed in Illinois, Indiana, Kentucky, Michigan, Missouri, Ohio, South Carolina and Tennessee Specializing in Professional Liability Insurance for Attorneys, Law Firms, Title Agents Offering: Legal Professional Liability, Title Agent E & O, Cyber Liability, Crime Insurance, Escrow Security Bonds

20 Insurance for Professionals Adam E. Gwaltney, Agent,