Interest in cyber coverage growing

As interest in cyber liability insurance continues to expand at an unprecedented pace, one insurer sees the coverage as essential for modern companies.

Risk Management News

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As interest in cyber liability insurance continues to expand at an unprecedented pace, New Empire Group sees the coverage as essential for modern companies.

“We introduced it about a year and a half ago,” says Jim O’Neill, executive vice president of New Empire Group. “Needless to say with the advances in technology, many, many more businesses now have a cyber-liability exposure so we’re aiming to protect all aspects of personal data security. Almost every business has an exposure at some level.”

According to an April Marsh Risk Management Research Briefing, the number of policies purchased rose 21 percent from 2012 to 2013.

“We probably see a 10 to 15 per cent submission increase monthly,” says O’Neil. “Almost every company will be breached in one form or another over the next year.”

Despite the fact corporate interest in cyber liability insurance continues to gain momentum, New Empire Group’s Cyber$ential program is designed for real estate entities with less than $5 million in revenues. The upper end of their premium is $950, which covers $1 million in liability and $250,000 in security breach expenses. Their lower end programs go as low as $350.

The costs may seem daunting but according to study conducted by Novarica, 85 percent of executives cite cyber risk as a top concern, and 69 percent say reputational costs arising from an attack far outweigh the associated financial costs.

Coverage limitations are also frequently cited as a concern, something O’Neil weighed-in on in a recent interview with Insurance Business.

“Coverage limitations are a real concern because cyber liability is multi-faceted. I think that gets to the point why we introduced Cyber$ential. The cyber liability policies aren’t standardized policies at this point, so someone has to read them in order to confirm what coverage is there,” says O’Neill. “If you’re not familiar with reading them and what coverages are available you can run into a problem. So yeah, coverage limitations are absolutely a concern. Agents and brokers need a coverage they can trust that covers a wide range of people.”

Although New Empire Group specializes in real estate coverages, their insights provide lessons for providers across commercial and personal lines, says O'Neill.
 

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