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Small Business: How to Get Your Cyber Claim Covered

Small Business: How to Get Your Cyber Claim Covered
August 30, 2015
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By Joe Salpietro

Companies from small startups to international corporations in every industry are facing increased cyber risks. Hackers are employing a number of methods to steal valuable financial and medical data, from attacks on corporate data to stealing unprotected smartphones and laptops. No business or industry is immune.

Insurance carriers are responding with a range of cyber policies aimed at mitigating the risks of today’s hyper-connected world. But because cyber coverage is still a new product, some small business operators may not be familiar with the nuances of their policies.

This lack of understanding can lead to disaster if your small business suffers a loss only to discover your policy won’t pay. Fortunately, a few simple strategies can help avoid a potential nightmare and ensure your cyber claim is covered.

1 – Get to know yourself. It’s crucial that small business owners understand their organization’s unique needs and vulnerabilities. This will enable you to knowledgeably review your coverage options and purchase a policy designed specifically to cover the risk areas you’re most likely to encounter. There are many policy flavors on the market, but each type of coverage has its own subtle differences and a one-size-fits-all solution probably isn’t the best choice. The scope and particulars must be suited to your own situation.

2 – Do your duty. Read your policy closely upon purchasing and pay careful attention to those “duties after a loss” that are outlined in it. What are your business’s obligations under the policy? Could failure to comply with the duties impair your ability to file a claim? You may be required to provide documentation about security measures or to report every instance of loss as quickly as possible. What may seem rather inconsequential today—the loss of a laptop, for example—could turn into a significant claim in time. Be sure you know what actions you need to take, and when.

3 – Rinse and repeat. When possible, small business operators may find they do best when they have the same carrier for traditional coverage as well as any cyber coverage policies. This strategy can significantly reduce any possible gaps in coverage, as each carrier often designs its policies to work together. It also gives the agent or broker improved visibility into where potential vulnerabilities may still exist. If a cyber issue arises, the business will be better able to quickly connect with the right resources and initiate the claims process.

4 – Keep it on the inside. It’s always recommended that small businesses have an internal cyber security policy in place. For example, identify specific steps and reporting requirements to be followed if and when there is a suspected breach. Every employee should be trained on what is expected of them when it comes to data privacy best practices, and they should know how to use any preferred security measures. By knowing the role those inside the business play in protecting sensitive information, owners are able to develop precise protocols that take advantage of their lean resources and position them to get their claim covered if a breach occurs.

Joe Salpietro is a cyber claims manager at IDT911.

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