Should You Buy Cyber Insurance?

How can cyber insurance help mitigate cybersecurity threats? Jason Ott, president of Aon Private Risk Management, offers his perspective:

How popular is cyber insurance?

Many times, cyber insurance is added on as an endorsement to a homeowners policy. However, the take-up rate among family offices is very low. We quote the coverage an awful lot but find that many clients do not take us up on the offer for the coverage.

In some cases, we’ve connected cybersecurity professionals with family offices for a comprehensive deep dive to assess their controls and systems, to ultimately provide them with a framework and best practices for the family and the office. The final step would be to put the insurance in place. The family offices generally feel so confident about their new controls that they say they don’t need the insurance. I can think of three family offices that I’ve worked with where we’ve had a cyber team complete the assessment for them, and then they have chosen not to take the insurance afterward.

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Another issue with cyber insurance and family offices: A traditional commercial policy is geared toward protecting financial obligations to consumers if their data has been breached. Well, that’s not what a family office does. So when you think about cyber and family offices, what’s the real issue? It’s crime. It’s someone within the family office, or someone close to the family, stealing money from them. We offer crime coverage, so many times we need to drill down on the root cause of the issues the family office is concerned about to find the right solution.

Can cyber insurance help with ransomware?

Many times, there’s a very simple endorsement that can be placed onto policies that covers ransomware. We always tell our clients not to pay the ransom. Get us involved. Let us turn in the claim. Insurance companies have third parties that they work with that manage these situations all day long. They will step in as quickly as possible, connect with the client and then they’ll work with whoever is ransoming to try to remedy the situation. Many times, it’s not worth it to pay the ransom. If you pay, you still might not get your data back. You might be better off just rebuilding or restoring whatever has been taken in a different way.

About the Author

Margaret Steen

Margaret Steen is the editor of FO Pro, The Family Office Professional. Based in Silicon Valley, she has written for Family Business Magazine for more than 15 years.


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