In today's digital world, any business can get hacked if management isn't careful. Cybercriminals target companies intending to steal valuable financial information like credit card numbers. While cyber liability insurance coverage helps protect some of your assets in some cases, it doesn't cover everything. Let's continue reading to learn about the 5 limitations that cyber insurance poses.
The potential loss of future profits stands as a significant concern in the aftermath of a severe cybersecurity breach, an issue that reverberates over an extended period. The repercussions extend beyond the immediate impact on equipment, data, and market share, encompassing a company's reputation's intangible yet crucial aspect. The fallout from such incidents can cast a shadow on the business for years, influencing customer trust and brand perception.
Cyber insurance often falls short when it comes to the loss of intellectual property value post-breach. Stolen designs sold on the dark web can diminish the market impact of intellectual property. It affects the immediate financial worth of the property. It poses challenges in restoring its perceived value and uniqueness, creating a coverage gap that businesses must be vigilant about bridging through strategic risk management.
While businesses often bolster their cybersecurity measures after a breach, cyber liability policies typically do not cover the expenses incurred for these enhancements. However, investing in risk reduction measures may contribute to lowering future premium costs. Despite this, the strategic investment in enhancing cybersecurity fortifies defenses and may catalyze mitigating potential future risks.
Cyber liability policies may not cover the payment of ransom to cybercriminals for regaining control of compromised systems. Additionally, losses resulting from employees falling victim to email-based scams may not be covered. Businesses must scrutinize their policies to understand how they address issues like business email compromise (BEC) scams. Companies are advised to meticulously examine their policies to grasp the intricate details and exclusions related to these increasingly prevalent forms of cyber threats, ensuring they are adequately protected against evolving tactics employed by cybercriminals.
Acts of war or cyberattacks orchestrated by nation-states are generally excluded from coverage in various insurance policies, including cyber insurance. Policies may explicitly state that they do not cover events associated with acts of war. It highlights the evolving cyber risk landscape, urging businesses to consider additional risk management strategies beyond insurance to fortify their resilience against these complex and geopolitically driven cyber threats.
It's difficult to win back clients' trust once they've had a negative experience with identity theft or financial loss due to a breach in your system. So, consult Knight Insurance Services to ensure your business has the best possible coverage against worst-case scenarios. Contact us today for more information about protecting your business assets.
Our team of friendly professionals are always on hand to help. Can't wait? Give us a call at (818) 662-4200.