Reporting an insurance claim matters when you have to narrow down how much is covered along with how much the person or business being insured will have to pay. With Cyber claims, many are confused as to whether or not they are covered under their policies.
The tricky part is the timing of when to report these types of claims to your insurance carriers. Sometimes, victims will pay the ransom essentially voiding the coverage they had through their carrier. Among recent examples:
1. A title agent inadvertently wired out over $250,000 to a fraudulent actor. They quickly paid the ransom, but this act voided their coverage when they reported it because they paid the money. 2. A property manager was hacked but a tenant was the one who sent over 700K to a fraudulent actor. 3. A company delayed reporting their claim and tried to settle the matter themselves resulting in an $800K settlement.
Cyber breaches can be catastrophically destructive. However, a claim might be voided if you’re not careful in handling the breach. Do not send the ransom or any money if you are asked to. Report the breach as soon as you can and notify your clients. Your cyber insurance only covers you if you follow the correct steps in reporting.