Gallagher Bassett has stressed the importance of cyber insurance to the modern business, as it identified a key factor to consider in selecting the right cover for the business.
The claims services provider noted that increasing reliance on data and automated processes – “most evident in the suggestions promoted by Google, eBay, Netflix, or Amazon which rely on machine learning to serve up targeted offerings” – exposes businesses and their clients to potential harm.
“While the use of data often dominates the narrative, these consumer offerings regarding product or service recommendations are informed by the behaviour of the prospect in the first instance,” GB said. “This means personal preferences and behaviours may be stored and analysed by AI agents to customise a user’s experience. The potential for individual harm as a result of the data breach in which sensitive personal data is exposed has been of concern to regulators for some time.”
To indemnify the costs of dealing with the after-effects of a data breach, including losses in business revenue flowing from that breach or outage, cyber insurance is a must, GB said, adding that “understanding the nature of the data the enterprise holds” is a key factor to selecting the right cyber insurance policy for the business.
“How critical is to the organisation in terms of business processes, as well as how much of it is personally sensitive such that a data breach could result in harm to the individuals whose information is being stored,” GB said. “The purpose of the policy is to transfer the financial risk that would result from the investigation, containment, notification, and potentially mitigation of a data breach. Investigation costs include expenses incurred in investigating an actual, or an alleged breach. Also, if there was an outage from third-party providers, such as cloud services, the policy can top-up lost business revenue. For enterprises, understanding the nature of the data assets, and the criticality of the business processes that data supports is vital in selecting an appropriate cyber insurance policy.”