Securing Comprehensive Protection: Linking Cyber & Crime Coverage

Co-written by Marc Galindo, Senior Vice President, Senior Broker, and Greg Wagner, Senior Vice President, Senior Broker.

Nearly every business now has some form of digital footprint. However, with digital presence comes digital vulnerabilities. Businesses face sophisticated threats that can disrupt operations, compromise sensitive information, and lead to significant financial losses. Among these vulnerabilities, cyberattacks and crime-related incidents are particularly damaging. As a result, having comprehensive insurance coverage for both cyber and crime is essential. Linking these two policies can maximize protection and avoid gaps in coverage.

The Cruciality of Cyber Coverage

The necessity of cyber insurance has skyrocketed as businesses of all sizes become entrenched in digitization. Cyber policies typically cover a range of incidents, including data breaches, ransomware attacks, and network interruptions. 

Common components of cyber coverage include:

• Data Breach ResponseCovers the costs of responding to a data breach, including notification expenses, credit monitoring, and legal fees.
• Business InterruptionCompensates for lost income and additional expenses incurred due to a cyber incident that disrupts normal operations.
• Ransomware and Cyber ExtortionProvides coverage for ransom payments and costs associated with negotiating with cybercriminals.
• LiabilityProtects against data breach or privacy claims, including legal defense costs and settlements.

Where Crime Coverages Steps In 

While cyber insurance addresses digital threats, crime insurance focuses on criminal acts that can cause financial loss. Crime policies cover a variety of incidents, such as employee theft, fraud, and forgery. 

Key aspects of crime coverage include:

• Employee TheftProtects against losses resulting from fraudulent or dishonest acts committed by employees.
• Forgery or AlterationCovers losses from the forgery or alteration of checks, promissory notes, or other financial instruments.
• FraudIncludes coverage for losses due to various types of fraud, including social engineering scams and computer fraud.
• Funds Transfer FraudProtects against losses resulting from fraudulent instructions that cause the transfer of funds.

The Role of Social Engineering Coverage

One critical component often overlooked in both cyber and crime policies is social engineering coverage. Social engineering involves manipulative tactics to deceive individuals into divulging sensitive information or transferring funds. This type of fraud has become increasingly common, and the financial impact can be devastating. Both cyber and crime policies offer sub-limits for this specific coverage, allowing companies to transfer the risk associated with these scams to insurance markets. Coordinating social engineering coverage across cyber and crime policies is crucial for comprehensive protection.

Key Aspects of Social Engineering Coverage:

• Fraudulent Fund TransfersCovers losses from deceptive communications that trick employees into transferring company funds to fraudulent accounts.
• Impersonation ScamsProtects against losses from cybercriminals posing as trusted partners or executives to manipulate employees into taking harmful actions such as funds transfers or releasing sensitive data. 
• Voice FraudProtects against losses from fraudulent instructions or requests made via phone, such as fake technical support calls leading to unauthorized access to company systems or funds.
• Phishing and Email CompromiseHelps cover the financial impact of phishing attacks where cybercriminals use email to deceive employees into disclosing sensitive information or executing unauthorized transactions.
• Invoice ManipulationProvides coverage for losses from criminals tampering with legitimate invoices or payment details, deceiving companies into making payments to fraudulent accounts.

Linking Cyber & Crime Policies

To secure comprehensive protection, cyber and crime policies must be designed to complement each other, ensuring seamless coverage, minimizing gaps, and enhancing the overall security posture of the business.

Here are several steps to achieve this integration:

• Policy CoordinationAs an agent, work with your client to coordinate the terms and conditions of both policies. This includes ensuring no gaps or overlaps in coverage and that both policies clearly define which incidents fall under cyber coverage versus crime coverage.
• Seamless Claims HandlingEnsure streamlined claims processes for both policies. Establish which policy responds to avoid delays and confusion in claims handling in the event of an incident.
• Integrated Risk ManagementDevelop a comprehensive risk management strategy to address cyber and crime threats. Integrated risk management includes comprehensive cybersecurity measures, employee training programs, and internal controls.
• Regular ReviewsEvaluate both policies with your client to keep up with evolving threats and ensure that coverage remains adequate and aligned with their business needs.

Benefits of Integrated Coverage

Linking cyber and crime coverage provides several benefits:

• Comprehensive ProtectionEnsures that all potential threats are covered, minimizing the risk of financial loss from cyber attacks and crime-related incidents.
• EfficiencyStreamlines the claims process to handle incidents and recover losses.
• ClarityEliminates confusion about coverage boundaries, providing clear guidance on which policy applies in different scenarios.
• Enhanced Risk ManagementEncourages a holistic approach to risk management, addressing both digital and traditional threats.

Protecting Your Clients in the Digital Age

In an era of pervasive cyber threats, having comprehensive insurance coverage is more critical than ever. By linking cyber and crime policies, businesses can ensure they are fully protected against a wide range of risks. This integrated approach enhances coverage, streamlines the claims process, and strengthens overall risk management efforts. Partnering with an experienced broker to coordinate these policies can provide peace of mind and comprehensive protection in a complex threat landscape. 

Partnering with Flow Specialty means access to both admitted and non-admitted markets in key states. We offer flexible primary and excess coverage options to cater to diverse needs. Our quick quoting abilities and extensive market options ensure seamless and efficient coverage. You’ll receive proposals ready for clients and expert guidance to boost clarity and confidence in liability risk management. Flow's AI-driven tools and streamlined automation simplify policy procurement, backed by personalized attention for effective liability management and client satisfaction.

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