Cyber security insurance

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4.CyberInsuranceNeed_Strategy.pptx

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Cyber Insurance Need & Strategy

Session 4

September 22, 2022

Agenda

1	Purpose of Cyber Insurance
2	Essential Cyber Insurance Coverage Elements
3	Cyber Insurance as a Risk Management Tool
4	Assignment 3 Introduction
6	Discussion

Enables innovation and adoption of technology

Cyber Insurance policies start to emerge

Coverage for electronic business interruption introduced

First-Party coverage introduced in response to California Security Breach and Information Act

Standalone cyber insurance as we know it today begins to emerge as a specialty coverage

Cyber insurance is a standard coverage

1990’s

2000’s

2003

2010’s

Today

Abbreviated History of Cyber Insurance

CryptoLocker

The first “crypto” malware

First Patch Tuesday

First iPhone

9 million Americans work remotely in 2019*

27.6 million Americans work remotely today*

NIST Introduces Framework for Secure Software Development

*Source: https://www.census.gov/newsroom/press-releases/2022/people-working-from-home.html

Directly addresses cyber losses not covered elsewhere

Charlie

Option to transfer risk

Transfer

Residual risk the organization can’t accept, control or avoid is transferred. This is why cyber insurance exists.

All organizations must accept some risk. This requires the ability to identify, quantify and assess business cyber risks.

Control

Organizations can buy down their risk with effective controls. This helps balance risk acceptance vs risk transfer.

Avoid

Not always an option, but some risks can be avoided.

Unfortunately, this is really hard to figure out!

Humans are vulnerable, software is vulnerable and no matter what anyone tells you you cant model cyber risk perfectly. Cyber insurance is really important right now and it’s something we need to have around in the future.

Organizations can use Cyber Risk Quantification (CRQ) tools to help determine the value of residual risk to insure.

Cyber Risk Transfer (continued)

Source - https://chubbcyberindex.com/#/splash

Supports Contract Requirements

Cyber Insurance: The [contractor/subcontractor/vendor] shall maintain Cyber Liability and First Party Breach Response Coverage with limits not less than $TBD per occurrence and $TBD in the aggregate to be maintained for the duration of the term of this Agreement. Coverage should include at a minimum Privacy Liability for failure to protect personal private information, corporate confidential information, or any other non-public information of which the [contractor/subcontractor/vendor] is responsible for maintaining integrity, availability and confidentiality; Network Security liability for failure to prevent the spread of a cyber incident; First Party Data Breach Expense coverage for the [contractor/subcontractor/vendor] expenses to respond to a network security or privacy incident.

Essential Cyber Insurance Coverage Elements

Third-Party Cyber Liability

First-Party Cyber Event Expenses

Data and Network Restoration Expenses

Business Interruption and Extra Expense

Cybercrime

Liability to Others

Third-Party Cyber Liability

Network Security and Data Privacy Liability

Media Liability

Regulatory proceedings, fines & penalties

Source: https://www.forbes.com/sites/edwardsegal/2022/02/05/ftc-announces-final-settlement-over-equifaxs-2017-data-breach/?sh=7504cc06565a

Direct expenses to respond to a cyber incident

First-Party Cyber Event Expenses

Legal guidance

IR/Forensics

Incident handling/containment

Notification & credit monitoring

PR & crisis communications

PCI-DSS fines & penalties

- NetDiligence Cyber Claims Study 2021

Restoring network and data after a cyber incident

Data and Network Restoration Expenses

Data restoration

Network restoration

Software & computer program restoration

Lost income during time of cyber incident disruption

Business Interruption and Extra Expense

Lost income during time of cyber incident-triggered technology disruption

Extra expenses to get back up and running

Lost income due to reputation damage

Source - https://portswigger.net/daily-swig/toyota-shuts-down-production-after-cyber-attack-on-supplier

Theft of insured’s funds by electronic/cyber means

Your Employees

The Fraudster

Your Vendors

Fraudster intercepts invoices from your vendors and changes payment instructions.

You think you are paying your vendor, but you are really paying the fraudster

Fraudster compromises your vendors email or impersonates one of your contacts.

Cybercrime

Electronic theft

Social engineering

Funds transfer fraud

Telecom theft

Ransom payments

Mike

Cyber Insurance as a Risk Management Tool

Cyber Insurance does more than pay claims

Provides a place to turn for help during a crisis event

Gently forces businesses to follow Cyber Incident Response best practices

Provides access to cybersecurity vendors that are pre-approved and vetted

Support for unknown or unanticipated cybersecurity events

Serves as a backstop behind good cybersecurity controls and policies

Ever expanding Pre-Breach resources to minimize losses and accelerate recovery

Cyber insurance is a place to turn for help

Supports cyber incident response best practices

Recover

Detect

Respond

Incident Classification | Claim Reporting | Incident Response Engagement

Planning & Testing | External IR Team | Provider Pre-Approvals| Coordination with Carrier | Documentation

Remediation & Improvements| Renewal Preparation | Claim Mitigation Strategy

The cyber insurance claim process follows cyber incident response best practices and most claims are led by a 3rd party data privacy attorney. This helps guide decision making and protect attorney client privilege.

Service providers, like incident handling, response and forensic investigation services are included in coverage and hired by the data privacy attorney on behalf of the client.

Engagement with external entities like law enforcement, government officials and even cyber criminals demanding ransom payment are handled and/or guided by trusted advisors recommended by the cyber insurance carrier.

Post-incident cybersecurity resources

Source: https://www.cna.com/web/wcm/connect/ad15a52d-7303-4595-ba32-aa853ae90bc2/CNA-CyberPrep-Brochure.pdf?MOD=AJPERES

Source: https://s0.hfdstatic.com/sites/the_hartford/files/cyberchoice-first-responders-contacts.pdf

Support for unknown and unanticipated cybersecurity events

Defenders need to succeed 100% of the time

Attackers only need to succeed once

Oh S!#*

Backstop behind controls

Cyber Insurance is not a replacement for cybersecurity this!

In today’s environment many foundational controls are required in order to qualify for cyber insurance.

However, no organization is 100% secure and it is not possible to ever fully implement a cybersecurity strategy. Good organizations have a 2-3 year roadmap. Cyber insurance provides a backstop behind controls and cybersecurity gaps.

Source - https://www.cisecurity.org/controls/implementation-groups

Pre-breach loss control resources

Source: https://www.cna.com/web/wcm/connect/ad15a52d-7303-4595-ba32-aa853ae90bc2/CNA-CyberPrep-Brochure.pdf?MOD=AJPERES

Source - https://control.coalitioninc.com/

Source - https://www.chubb.com/us-en/business-insurance/cyber-endpoint-security-solutions.html

Assignment 3 Overview

Instructions (Delete before submitting)

Pick the title slide that aligns with your organization (Healthcare, Manufacturing, Non-profit or Legal) and delete the others. Please also be sure to enter your name on the title slide.

In 3-5 slides please present how cyber insurance would help your organization by following these guidelines:

Slide 1: Identify a few (3-4 is fine) key cyber insurance coverage elements that you think might help your organization manage cyber risk. Use the risk profile you created in Assignment 2 as your guide. Try to align Gaps or Requirements you found with insurance coverage.

Slide(s) 2-3: On the next 1-2 slides justify your reasoning for selecting the cyber insurance coverage elements you identified in the previous section. Provide examples of gaps, requirements or other risk management needs, and briefly explain how the coverages you are considering align with these exposures.

Slide (s) 3-5: Cyber insurance does more than pay claims. What are a few elements over and above paying claims your organization may be able to use to further cybersecurity or risk management objectives?

Note: feel free to pick your own titles for each slide

Please do your best to make the slides compelling. Don’t just write a list of things. If you need more room to explain something and don’t want your slides to be overly cluttered, feel free to add additional text in the notes section.

Keep in mind you will NOT be presenting these so your slides will need to stand on their own. Again, feel free to use notes section to provide additional information that does not fit on your slides.

All final submissions should be a minimum of 3 slides and a maximum of 5-6 content slides (Title, section breaks and any placeholders at the end do not count as content slides).

Cyber security insurance

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