Claire-ification IA&B Vice President - Advocacy Claire Pantaloni, CIC, CISR provided this month’s answer.
QUESTION: One of my carriers updated their contract and added a requirement that I carry a Cyber policy. Is this standard?
ANSWER: Not yet, but it’s likely only a matter of time. While Cyber or Privacy/Data Breach policies have been around for some time now, the businesses that have purchased them, so far, have done so of their own initiative. Generally, these early adopters have been businesses that hold a fair amount of personally identifiable information relative to their customers and those which are more keenly aware of the privacy risks surrounding their operations. This is also true of independent agencies. In the last couple of years, we have started seeing carriers amend their agency contracts to include a provision stating that the agent must carry a Cyber policy in addition to an E&O policy (yet another reason, if one was needed, why agents must read their contracts carefully). Upon signing the agreement, the Cyber policy becomes a contractual requirement.
As side notes to this question, we would add: • On the whole, having a Cyber policy is a wise move for insurance agencies. •
Cyber policies are not standard, and the main challenge is to review the coverage carefully: Does it include both first-party and third-party coverage? What are the exclusions? In addition to exclusions, are there any conditions for coverage to apply?
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IA&B offers several options, both as stand-alone policies and as endorsements to the agency’s E&O. (A note of caution about the endorsements: They tend to offer much narrower coverage than a standalone policy.) If you’d like a quote, contact David Wertz at DavidW@IABforME.com or 800-998-9644, ext. 506.
Ask our experts! Have a question? Rely on our team to find the answer. Contact Claire: 800-998-9644, ext. 604 ClaireP@IABforME.com IABforME.com
As more states enact laws governing cybersecurity – such as what New York, South Carolina, and Ohio have done – more agency agreements will incorporate provisions related to cybersecurity, including cyber coverage.
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