Cyber Claim Example

These are the most frequent claims experienced by small businesses in the U.S.

Understanding Privacy Loss Claims

Privacy loss claims are increasingly frequent in a world where digital data is a major asset. These claims may arise from incidents where sensitive customer information is exposed due to lack of encryption or security. For instance, a healthcare provider might face a privacy loss claim if patients’ medical records are inadvertently made available online due to a server configuration error. In such cases, affected individuals can claim for damage related to potential identity theft or violation of privacy rights.

Claims Related to Funds Transfer Fraud

Funds transfer fraud can occur through unauthorized electronic transfers from bank accounts. A typical example involves a corporation falling victim to a phishing scheme, resulting in a large sum of money being illicitly transferred to a fraudster’s account. When the company assesses the loss, it might make a claim based on their cyber insurance policy to recover the stolen funds. Insurance claims for this type of loss necessitate demonstrating that the transaction was fraudulent and unauthorized.

Ransomware Loss Claims Explained

Ransomware attacks are a significant threat, locking crucial systems or data until a ransom is paid. Consider a small business whose accounting system is locked by malware; the attacker demands a significant payment to release it. In filing an insurance claim, the business would showcase the costs related to IT recovery efforts, potential ransom payments, and loss of income during the downtime.

Check with your current insurance policy or broker to ensure AT LEAST these three types of claims are covered.  But also be aware, cyber insurance policies often cover such incidents, as long as the conditions for coverage, like having updated security protocols, are met. So also be sure your loss prevent protocols are up to date for a business of your size and in your industry.