How to Evaluate a Cyber Insurance Agent
There’s been a notable increase in ransomware attacks during the first half of 2023. This raises cybersecurity concerns and hints at potential future price hikes for cyber insurance.
Insurance companies need to find the right balance between the premiums they charge and the losses they have to cover due to these attacks, hence the price increase.
What does it mean for your business?
It means that getting the right cyber insurance has become even more difficult. That’s why having a cyber insurance agent to help you navigate its complexities will be beneficial.
But what is a cyber insurance agent, and how do you choose the right one for your business? That’s what we’re going to tackle in this article.
Here at Intelligent Technical Solutions (ITS), we have over 20 years of experience helping businesses manage their cybersecurity to protect their businesses from physical, financial, and reputational damage. We sat down with Marvin Cigarroa, a cyber insurance expert from DataStream, to share his knowledge.
Here, we’ll go over the following:
- What is a cyber insurance agent?
- Key considerations when looking for a cyber insurance agent
- Questions you need to ask your cyber insurance agent
- Benefits of working with an agent instead of just doing it on your own
After reading, you should be able to select a reliable and effective cyber insurance agent for your business.
What is a Cyber Insurance Agent?
A cyber insurance agent is a professional who helps businesses get insurance coverage against cyber incidents like hacking and ransomware attacks.
They are like your personal advisor, educating you about cyber risks, assessing your needs, and recommending suitable policies. Agents also assist with the claims process when a cyber incident occurs.
Simply put, you hire a cyber insurance agent if you don’t want to do the heavy lifting of knowing, understanding, and managing your policy independently.
6 Considerations When Looking for a Cyber Insurance Agent
Every policy form is different. And quite literally, there is no standard form for cyber insurance.
“So, when you’re looking for an agent to help you find cyber insurance, it’s important to work with [someone] comfortable and confident and knows exactly what they’re talking about,” Cigarroa says.
Look for these qualities:
1. Expertise in cybersecurity and insuranceBegin your evaluation by assessing the agent’s expertise in both cybersecurity and insurance. A knowledgeable agent should have a deep understanding of the evolving cyber threat landscape, including:
- The latest attack methods,
- Vulnerabilities, and
- Industry best practices for prevention and mitigation.
They should also be well-versed in the intricacies of cyber insurance policies, ensuring they can tailor coverage to your business’s unique needs.
2. Expertise in your industry
Look for an agent who has experience working with businesses in your industry. Cyber risks can vary significantly depending on the sector, so an agent who understands your specific challenges and regulatory requirements will be better equipped to offer suitable coverage options.
3. Ability to provide customizable policies
A reliable cyber insurance agent understands that one size does not fit all. They should be willing to customize policies to match your business’s risk profile, size, and budget. This might involve a detailed assessment of your IT infrastructure, data handling practices, and potential exposure points to cyber threats.
4. Expertise in claims handling
The true test of an insurance agent’s effectiveness comes when you need to file a claim. Inquire about their claims handling process. They should have a clear and straightforward procedure for reporting and processing claims and a history of successfully helping clients navigate the claims process.
5. Strong partnership with insurers
Your cyber insurance agent should have a strong network of partner insurers.
“Because you might be working with an agent who may only have one or two options to provide you with a quote or cyber insurance. And then that really limits your options. That limits the number of insurance carriers they could market,” Cigarroa says.
So, avoid agents who are limited to only a few insurance providers, as they may not be able to offer the best terms for your business.
6. Regulatory compliance knowledge
Cyber regulations and compliance requirements are constantly evolving. A reliable cyber insurance agent should be well-informed about relevant laws in your industry and region. This ensures that the coverage they recommend aligns with legal standards.
Questions to Ask Your Cyber Insurance Agent
Asking the right questions can help you better understand their expertise and ability to meet the needs of your business. So, we’ve compiled the most important questions you should ask upon the initial meeting with a potential agent:
- What types of cyber insurance policies do you offer?
- Can you provide references from clients in similar industries?
- How do you handle claims?
- What cybersecurity resources do you provide?
- Are there any policy exclusions or limitations I should be aware of?
- How do you stay updated on changes in cyber threats and regulations?
- Can you explain how policy pricing is determined?
- Do you work with a variety of insurance carriers?
- Can you provide examples of cyber incidents covered by your policies?
- How does the policy address both first-party and third-party liabilities?
What Are the Benefits of Working with an Agent?
Partnering with an agent offers many advantages beyond simply filling out a form online.
“There are online options for clients who go out there and try to do it themselves. I would caution them against that. The concern for me is that a client will not really understand [the coverages] they should have in a policy,” Cigarroa mentions.
Cyber insurance agents are specialized professionals with in-depth cybersecurity and insurance expertise. Their knowledge allows them to assess your unique needs and tailor a comprehensive protection policy for your business.
Additionally, cyber insurance agents provide access to a network of insurers, which you may find hard to possess on your own. They guide you through policy selection, claims processing, and risk assessment, saving you time and effort.
By relying on their insights and assistance, you can confidently manage your cyber risks while focusing on your core business operations.
Need Help with Your Cyber Insurance?
Ensuring robust business cybersecurity helps protect your data and processes and lessens the sum you’ll have to pay for your cyber insurance.
At ITS, we help our clients bolster their network defenses to prevent potential risks. If you want to know more about cyber insurance for your business, browse through our published articles:
- 5 Things to Check to Get Cyber Insurance Approval
- How Much Cyber Insurance Does Your Business Need?
- Things to Prepare for Cyber Insurance and Why They're Important
You may also schedule a meeting with one of our cybersecurity experts to know your next steps.