Making regular updates to cyber policies is crucial for any insurance company who wants to be seen as a leader in the burgeoning cyber space.
A good example of the proactiveness required was displayed by NAS Insurance when the company rolled out an update to its technology E&O and cyber liability forms; a coverage designed to be a ‘one-stop-shop’ for a tech company’s E&O insurance needs.
Already providing coverage for privacy regulatory defense and penalties, breach event costs, cyber crime, and cyber extortion, NAS added a new layer of protection that it saw becoming increasingly necessary: patent infringement defense. A recent study by the American Intellectual Property Law Association found that a business accused of patent infringement spends an average of $1.7 million in defense and legal fees.
“The update means the policy now covers third party patent infringement claims,” said Jeremy Barnett, senior vice president of marketing at NAS Insurance Services. “If a tech company comes up with a new widget, for example, but someone comes after them with a patent infringement case, the tech E&O policy will help provide protection against that claim. You can imagine how that type of claim might stifle innovation for a tech company. Being constantly barraged by attorneys with claims – it causes a real disruption.”
The patent infringement add-on also accompanies another much-needed feature in a modern policy: brand protection. BrandGuard, as the NAS policy describes it, provides coverage for income loss incurred as a direct result of an adverse media report or breach notification following a security breach or privacy breach.
Cyber criminals are constantly working to hone their methods and better their strategies, and if insurance companies are to continue providing adequate coverage they need to be doing the same with their cyber policies.
“We are continually updating all of our cyber policies to add broader features,” Barnett said. “There are always new risks that companies need additional protection against beyond the particulars of D&O or traditional cyber coverage. The cyber issue is an evolving trend and is no longer just about the loss of data, it’s to do with things like business interruption. That’s why coming up with additional endorsements that help different types of businesses is so important.”
Source: Insurance Business America