17 August 2016USA analysis

Data security risk has increased ‘exponentially’ in the last few years: Zurich

Zurich Insurance has introduced an insurance solution for companies and their captives interested in protecting themselves from risks associated with data security breaches including cyber-related breaches.

Zurich shared details of its cyber solutions for captives at the Vermont Captive Insurance Association annual conference in Burlington, Vermont.

Zurich’s security and privacy protection policy is now available to help companies and their captives cover the costs associated with a data breach. These include: business income loss; dependent business income loss; notifying regulatory authorities and affected individuals; regulatory fines; media liability; and defense and settlement.

“The risk of having sensitive data lost or stolen has grown exponentially over the last few years, largely due to the interconnectedness of everything we do,” said Steve Bauman, senior vice president and head of captive services for Zurich North America.

“By integrating Zurich’s security and privacy protection program into a captive, customers can better gain control of their cyber exposures by more effectively managing their retention and deductibles. They will also have the support of Zurich’s global network and services operating in more than 200 countries.”

Captive customers who buy the cyber solution have the access to the Zurich Service Corporation’s risk engineering team, which is experienced in cyber-related issues.

Resources are available to qualified customers for breach coaching and employee training that can help build awareness of local regulations.

“Cyber continues to be a top risk management concern for many of our customers. Businesses are exploring new avenues to address cyber risk, especially given the elastic conditions of the Security and Privacy insurance market,” said Erica Davis, senior vice president, head of specialty products for Zurich North America.

“Demand for cyber coverage and risk engineering services has skyrocketed. Captive utilisation with security and privacy coverage may be the optimal solution for customers seeking a blend between program flexibility and the benefits of a risk transfer approach.”

Zurich is also a partner in the World Economic Forum Global Risks Report. The 2016 report stated that cyber attacks present the greatest threat to doing business, according to a survey of U.S. business executives.