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What is typically not covered by a Cyber Insurance Policy?
What is Cyber Insurance?
Cyber Insurance is a policy used to cover a business for losses related to cyber events. These might be losses or business costs suffered by the insured business, as a result of a direct cyber event, or as the result of a cyber event at an external supplier. Cyber Insurance policies also address losses suffered by other businesses and individuals connected to the insured business as a result of a cyber event in the insured business.
Cyber event response costs to resolve the cyber event, the cost of lost revenue and the costs of defending or settling a claim are also typically a critical part of your Cyber Insurance policy.
Cyber Insurance will cover many losses due to cyber events, however it is important to understand what may typically not be covered by a Cyber Insurance policy.
What does a Cyber Insurance policy not cover?
Items that may not be covered by your Cyber Insurance policy include:
Losses arising from:
- Criminal or fraudulent activities by the policy holder and its employees
- Deliberate acts of wrongdoing by the policy holder and its employees
- Patent infringement by the policy holder and its employees
- Bankruptcy, eg. of your 3rd part IT infrastructure providers
- Negligent actions of Directors or Officers
- Power or utility failures
- The impact of Radioactivity, Pollution or War
Costs of:
- Physical damage of tangible property
- Bodily injury
- Losing the commercial value of your (Intellectual Property) IP assets
In addition, there are also certain conditions that you need to meet in order to be covered. This includes answering questions truthfully when setting up your Cyber Insurance policy, otherwise known as your Duty of Disclosure. Importantly, if it is later found that you knew of any issues before the policy contract period you may not be covered for related cyber incidents. It is also critical that you comply with the claims conditions, eg. reporting time frames, etc. in order to be fully covered in the event of a cyber incident.
How can I know what is and is not covered by my Cyber Insurance Policy?
To know what you are and are not covered for, always read the Cyber Insurance policy Product Disclosure Statement (PDS). The PDS will outline all exclusions, things that you are not covered for, and conditions that you need to meet to be covered by your Cyber Insurance policy.
To know what you are and are not covered for, always read the Cyber Insurance policy Product Disclosure Statement (PDS). The PDS will outline all exclusions, things that you are not covered for, and conditions that you need to meet to be covered by your Cyber Insurance policy.
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Aimee Henderson
It is also important to speak with your insurance broker, or connect with us at Grace Insurance, for a professional understanding of what is and is not covered by your Cyber Insurance policy and whether your Policy is right for your business.
How can I fill the gaps in my Cyber Insurance?
Being aware of what your Cyber Insurance policy does not cover is the first step to becoming fully covered. When you know the gaps, you are able to fill them.
Cyber Insurance is a great complement to other types of insurances such as public and product liability insurance, professional indemnity insurance, Directors and Officers Insurance and business interruption insurance.
At Grace Insurance, we can help you to navigate the exact circumstances and risk profile of your business and tailor policy coverage to meet your needs.
General Advice Warning: This advice is general and does not take into account your objectives, financial situation or needs. You should consider whether the advice is appropriate for you and your personal circumstances. Before you make any decision about whether to acquire a certain product, you should obtain and read the relevant product disclosure statement.
All information above has been provided by the author.
All information above has been provided by the author.
Aimee Henderson, Grace Insurance, ABN 63 133 156 742, AFSL 233750
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