Top Cyber Insurance Companies – Hiscox

Hiscox have managed to establish themselves relatively quickly as probably the market leader in cyber liability insurance, in part based on the policies they provide, in part on the resources and risk modelling they help with, and in part on the existing customer base which has a high focus on small business and various types of liability insurance.

All these areas are hugely important regarding cyber insurance. The scale of cyber security and related risks is almost  so big that it is virtually impossible to comprehend. As such, as Warren Buffett recently pointed out, many insurance companies do not want to enter the market because it is so difficult to determine levels and cost of risk.

What Hiscox have done is essentially to build on that existing customer base, and the reputation they already have, to advance what is both an insurance policy in terms of financial indemnity, but also to provide a risk management process that actually deals with the realities of any data breach of cybercrime.

Hiscox Customer Base

While Hiscox may be active in many areas of insurance, one of their main areas of focus is on small businesses and related liability insurance. This focus brings together a significant number of what could be termed niche areas of business, but which all share common liability threats.

These liability threats could be around general business liability, public liability insurance, e and o insurance,  product liability insurance,  employers liability insurance etc. Whilst every business is different, they have a thread of similar needs that means these types of liability insurance can be both general and specific the same time.

What this has allowed Hiscox to do is to develop specialist insurance policies that in fact can be targeted at very specific industries and professions.

This has given them a fairly unique access to understanding the needs of a variety of different trades and businesses, which they have been able to very successfully build on in understanding the needs that relate to cyber insurance, for every type and size of business and organisation.

Hiscox Cyber Insurance Policies

Cyber insurance policies can vary quite widely in terms of the level of coverage and the cost of accessing them. What Hiscox have done  in terms of coverage is to provide what is pretty much a gold standard as to how a data breach claim should be dealt with.

This means that aside from any financial indemnity that the policy provides, the policy also provides a working incident response team, which can help manage both the immediate and longer term realities of what a data breach involves.

In practice this means that a Hiscox insurance policy will provide access to a team of selected individuals and companies who can manage a number of areas of the claim. This can include IT specialists, lawyers, PR companies, financial analysts  etc.

The work of this team will revolve around dealing with and paying any ransom that may be demanded, restoring  the integrity of an IT system, dealing with any reputational damage that the company or business may suffer and notifying and dealing with any registry bodies may need to be notified of the breach.

The team should also include specialists who can forensic examine and come to understand the reasons for the data breach, and put in place systems to make sure it does not occur again once the integrity of the IT system has been restored.

The insurance policy should also provide some type of business interruption insurance until the IT system and the business itself is up and running again as per its normal practice.

In addition, the policy is likely to provide help for individuals with information has been accessed unlawfully, such as providing access to credit monitoring systems in relation to identity theft.

Cyber Security and Risk Management

Hiscox offer a significant number of tools and resources to both potential customers, and signed up clients, which give them a significant amount of advice regarding risk management of cyber security. There are two particular reasons this is done.

One is simply that everything a company can do to reduce its risk exposure to a cyber security threat reduces the likelihood of a claim under its either insurance policy. This should be good news for everyone in terms of reduced levels of claims exposure for the insurer, and hopefully reduced costs by way of premiums and deductibles for the company or business being insured.

The other reason is that it creates a level of trust around the insurers ability to understand the security risks at how best to deal with them.

Cyber insurance is a fairly new type of specific insurance policy, and part of its growth and appeal is the fact that insurers like Hiscox  are very active in taking the lead to help companies understand the nature of cyber security risks, and how best they can be managed.

Many companies and businesses of all sizes are still to an extent in the dark on the reality of cyber security risks, either through complacency or lack of resources.

Providing risk management assistance allows Hiscox to gain a foothold on virtually any companies radar, and to be able to build on it by way of providing cyber insurance policies if and when needed. It becomes a self-fulfilling loop that should in theory benefit both sides of the industry.

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