Five Things to Know About Cybersecurity Insurance to Sell Better

Cybersecurity insurance protects people as well as businesses from internet threats. According to Statista, in 2020, there were more than one thousand cyber data breaches in the U.S. alone. With the digital boom, internet threats are becoming more frequent. Despite the high risk of internet breaches, cyber insurance is not as common as you think it is.

While most of the big corporations are covered, small businesses have a difficult time with internet threats. According to a report by Hiscox, less than 21% of small businesses have insurance of this type. There seems to be quite a discrepancy in the rates of attacks and rates of coverage. To reduce this, carriers—as well as independent agents—need to start selling more cybersecurity insurance.

Here are some things you ought to know before selling.

In this blog

There are No Cybersecurity Standard Policies

By and large, cybersecurity insurance is fairly new. As a result there are no standard policies for it yet. The coverage provided in this type of insurance depends on the insured’s needs and the ability of a carrier/agency to provide.

Although not having a standard may seem bad, you can help your clients meet all of their needs with a flexible offer.  

best cybersecurity insurance

The Market Value for Cybersecurity Insurance

Before selling any product, it’s a good idea to know the market value. It helps you have a better understanding of what you are about to deal with. Another recent report by Statista on cybersecurity insurance said that the size of the global cyber insurance market was around eight billion U.S. dollars in 2020.

In the same report, the size of this market is predicted to rise to around twenty billion U.S. dollars by the year 2025. This means that the demand for this coverage is expected to rise steadily. It is safe to start selling.

Claims Process

Similarly, a report by Statista said, according to a study conducted in 2020, a majority of filed claims involved an insuring clause providing breach incident response and crisis management. The next leading cause of filed claims was clauses related to data and privacy breaches. The claims process changes according to the state an insured is in. In cybersecurity insurance, just like other insurance, the claims process has three parties involved. This typically consists of the insured’s defense counsel, broker claims assistance and the insurer’s claims team.

The Biggest Data Breaches

An insurance agent who is trying to sell cybersecurity insurance should know the data on some of the biggest data breaches of modern times. This will be especially helpful for you when you are making a sales pitch to businesses.

One of the most well-known and biggest data breaches of the last decade was the Yahoo data breach in 2013. According to The New York Times, This security breach affected all of Yahoo’s three billion accounts. It is perhaps the biggest digital attack to date. Many insurers started making cybersecurity insurance plans after this. Hence, sometimes real-life incidents resonate the best with people.

Aspects That Cybersecurity Insurance Covers

Cybersecurity insurance covers various part the digital life. Basically, it is typically designed to provide coverage to technology providers, consumers, and companies that handle sensitive information. So, these are your potential client base.  

Although there’s no standard template for coverage, basic coverage should provide protection for the data a company owns and liability coverage in the event of a breach.  

budget cybersecurity insurance

Bonus: Recommendations for Cybersecurity Insurance Coverages

There are various things to consider when writing cybersecurity policies. Some general tips are:
  1. It’s important to state all of your policies and processes in a written document.
  1. Update risk assessments as newer threats arise.
  1. Educate your employees on cybersecurity.
  1. Provide security training for clients to add value to your packages.
  1. Add protocols for breach-response incidents.

To Conclude

Cyber security insurance is a fairly new type of coverage. Insurers only started providing it in the 1990s and people have just started to see the importance of it. Knowing about cybersecurity and the benefits of cybersecurity insurance is not enough. Making sure that you can convince your buyers with relevant facts and figures can give you an edge in the market.

Connect with us for more information on how you can best provide this type of insurance. We have partnered with 80+ insurance carriers. We can definitely help you sell better!

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