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When you buy car insurance, you do so on the promise that you will demonstrate good behavior.
There is a mutual pact between you and your insurer.
The same principle applies with cyber insurance.
However, as the volume of cyberattacks increases, insurance cover is now harder to get.
That is because the financial losses from a breach have become disproportionate to the premiums that insurers charge.
However, insurance premiums continue to soar, and insurers have become increasingly cautious about the risks they undertake.
To offset pay-outs, some insurers have taken steps to exclude certain costs.
The court deemed it to be an indirect financial loss, and therefore not covered by the policy.
You may wonder then what your cyber insurance covers.
Would you get compensation for losses as the result of an employee clicking on a phishing email?
Would your provider honor a pay-out if you voluntarily pay a ransomware demand?
However, it is unlikely any underwriters would include these fines.
This was down to their ability to activate incident response and conduct comprehensive investigations before resorting to insurance claims.
This level of control allowed them to make informed decisions, reducing unnecessary insurance activations and the associated costs.
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