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Cyber insurance: Worth it, but beware of the exclusions

Taylor Armerding | Oct. 21, 2014
It's what all sensible people do to mitigate the risk of catastrophic financial damage: Buy insurance. There's not even a choice when it comes to auto and health risks – insurance is a legal mandate. And most people would agree that anyone with a house who does not carry homeowner's insurance is a fool or fabulously wealthy.

Many of the policies, with premiums ranging from $6,000 to $37,000, limit coverage to just $1 million, which in today's world rarely comes close to covering the total expenses.

And those limits may decline. "As technology risks continue to evolve, many carriers are starting to pull back on the types of industries and risks they will cover," Marciano said.

In short, cyber insurance can ease the pain, but it won't eliminate it. "Most policies are nowhere near inclusive of all cost associated with breaches," Rafferty said, "but they can certainly offset the cost of the response and first-party monetary loss for breach victims."

 

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