Monday, August 13, 2012

The Most Confusing Insurance Term Is…

borgThe concept of Cyber Liability is confusing enough - don’t complicate things by confusing Cyber Liability with Cyborg Liability. At this time, I don’t have any markets available for the latter. But you never know…

(First in a series)

I’m sure there are many insurance terms that aren’t clearly understood, or that don’t really describe what the coverage is, but my vote is for “Cyber Liability”. Let’s face it, we are now reading and hearing about “cyber” everything. Cyber bullying has become a major issue, especially for school age children. I’ve seen a number of commercials for cyber knife medical technology. And of course there are many others, including cyber space, cyber crime and cyber security.

Merriam Webster online dictionary defines cyber as: “of, relating to, or involving computers or computer networks (including the Internet) <the cyber marketplace>”

Based on that definition, then cyber liability could be insurance for your client whenever they’re using the internet. Or perhaps it’s any insurance coverage involving computers or computer networks?   I think I’ve seen requests for cyber liability that involve all of these areas of exposure/operations and more.

Here’s what I think most people mean when the term “cyber liability” surfaces - more than likely they’re referring to an insurance product that’s meant to provide some level of coverage for a data breach, also called an information security breach.

The simplest way I can define or describe a data breach is when  personal information – usually critical financial info – of your insured customer is lost or stolen. In fact, the data really doesn’t even have to be lost or stolen. If your client retains credit card, drivers license and/or other personal financial info, and their network is hacked, they lose a laptop or other electronic device and the info may be at risk, your insured has an obligation to notify their clients. That can be costly, so you need to make sure the policy either covers those costs, or you advise your client that is does not.

In subsequent posts, I’ll get into coverage details, applicability to some of the business operations you may encounter and so forth. In the meantime, if you have questions or need some help sorting out a current quote – call Tuscano. And yes, resistance is futile.

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