CFC, a leading specialist insurance provider in emerging risk and a market leader in cyber insurance, conducted a recent survey revealing that IT departments constitute the biggest obstacle to the sale of cyber insurance policies. Brokers from across the United States participated in the poll. It sheds light on the challenges they face when promoting cyber insurance solutions.
31% of the brokers surveyed reported encountering resistance from their clients’ IT departments, with these professionals asserting that they did not require cyber insurance. According to Michael Phillips, Cyber Practice Leader USA at CFC, this resistance stems from a common misconception among IT professionals. They often perceive cyber insurance as a replacement for security controls when, in reality, the two serve different purposes. Just as locking your doors does not eliminate the need for property insurance. Likewise, robust IT security measures do not diminish the value of cyber insurance.
Cyber Attacks Happen
Phillips emphasized that cyber attacks can still happen despite best efforts to prevent them. A strong cyber insurance policy not only transfers the financial risk associated with a cyber event but also offers proactive services to prevent attacks from occurring in the first place. CFC’s cyber insurance solution combines comprehensive cyber coverage with unrivaled incident response and proactive cyber protection. This includes identifying cyber threats targeting policyholders and alerting them through CFC’s Response App.
“There’s a long-held misperception amongst IT professionals that cyber insurers are pitching insurance as a replacement for security controls, when in fact the reality is vastly different.”
Michael Phillips, CFC.
Furthermore, CFC’s cyber insurance provides coverage for various costs associated with a cyber event, such as incident response expenses (including IT forensics, legal, breach notification, and crisis communications), system damage, and business interruption (resulting in a loss of income), full data re-creation (including the use of contract staff or employee overtime), and network security and privacy liability (covering management liability and regulatory fines and penalties). CFC offers unlimited reinstatement for first-party coverages. This means that a policy aggregate does not limit policyholders and will have the full benefits of coverage available each time a crisis strikes, even if they experience multiple cyber incidents in the same policy period.
Beyond The IT Hurdle
Apart from IT departments, cost was identified as the second most significant obstacle to the adoption of cyber insurance. 25% of brokers reported that clients viewed cyber insurance as too expensive. While price is always a consideration, Phillips emphasized the substantial cost associated with cyber claims. Cybercrime is costing businesses of all sizes, particularly smaller organizations, billions of dollars annually. Therefore, IT departments and proactive cyber insurers like CFC can work together to provide businesses with the best possible protection against cybercrime at a cost that aligns with the necessary level of protection and support.
The survey conducted by CFC highlights the misconceptions and challenges brokers face when selling cyber insurance policies. It underscores the need for collaboration between IT departments and proactive cyber insurers to enhance businesses’ protection against the growing threat of cybercrime. By addressing these barriers, both companies and insurers can work together to safeguard against the potentially devastating financial consequences of cyber attacks.
Source: Poll: IT departments the biggest obstacle to brokers selling cyber.
Other News: BOXX Insurance Expands Cyber Insurance Protection(Opens in a new browser tab)