The Wrong Cyber Insurance Risks Financial Ruin

Time to Invest in Stand-Alone Cyber Insurance


What if you think you have cyber insurance only to find out too late that it doesn't adequately cover your cyber risks? Cyber policies vary greatly and offer coverages that are often difficult to compare. The right stand-alone cyber policy will protect your balance sheet from unfunded liabilities.

A specialized cyber agent will enable you to understand and manage your cyber risk to prevent financial ruin. In the words of Sherlock Holmes, the game is afoot! Don’t leave your assets exposed.


If you cannot bear a financial loss from a cyberattack, then you must have affirmative, explicit cyber insurance coverage.

How do you ensure that you have comprehensive cyber coverage? From an affirmative, Stand-Alone Cyber Insurance policy tailored to fit your cyber risk tolerance.

Assumptions do not provide coverage.

Silent cyber is not a guarantee of cyber coverage.

You need to understand what is explicitly covered and excluded in your current commercial insurance policies. Policy wordings grant coverage, exclude coverage, or are silent on coverage.

Cyber Armada Insurance, is prepared to help you protect your balance sheet from the increase cyber loss frequency and severity by investing in Stand-Alone Cyber Insurance.

Renewal Season

During the renewal season, now is the perfect time to consider investing in Stand-Alone Cyber Insurance.

Silent Cyber

Silent cyber means that your insurance policy does not affirmatively grant cyber coverage – even if you assumed you had the coverage.

We explored the term silent cyber in our earlier article. Coverage disputes about the meaning of an insurance policy, the insurance company’s intended coverage, and your understanding of the coverage involve costly and complex litigation in court.

The pursuit of clarity is a bumpy road of inconsistent rulings by courts.

As noted in our previous article, a couple of examples illustrate this inconsistency:

  • In 2015, the Firth Circuit ruled in favor of the insurer, finding social engineering to be general fraud, rather than computer fraud required under a crime policy.
  • In 2018, the Sixth and Second Circuits ruled in favor of policyholders, indicating that the tide may be turning in finding coverage for social engineering schemes under crime policies.

The good news is that you have cyber solutions available to you.

First, you must confirm what is explicitly covered and excluded in your insurance policies.

Next, you need to ensure that you have cyber coverage appropriate for your cyber risk tolerance.

Your commercial insurance policies cannot provide the same clarity and specificity as a Stand-Alone Cyber Insurance policy tailor-made for your cyber risks.

The Case for Stand-Alone Cyber Insurance

Your business stands a better chance of surviving the financial fallout from a cyberattack with a robust Stand-Alone Cyber Insurance policy.

Some of the cyber coverage options include:

  • Ransom payment demands during a ransomware attack:

Ransom payments (often in cryptocurrency) agreed with the prior written approval of the insurance company.

Ransom negotiations with the hackers (regarding the ransom demand with the help of a security expert).

  • Business interruption during a cyber event:

Lost net profits during a shut down during a ransomware attack (after a brief waiting period and during a restoration period).

Extra expenses, including payroll, during a shutdown of your computer network.

  • Data recovery or restoration:

Recovering or restoring lost programs, software, or data due to damage, disruption, theft, or misuse of your data during a cyber event.

  • Incident response during a cyber incident:

Incident response planning -- before a cyber incident.

Incident response team -- pre-selected from a panel of experts.

Cyber incident response costs incurred.

  • Social Engineering:

Robust cyber insurance policies offer social engineering coverage, funds transfer fraud, or invoice manipulation, some with assistance in recovering some or all funds, and others reimbursing you for the lost funds. You will want to review your limits with your broker and carrier.

  • Employee cyber risk awareness training:

Employee training focused on reducing the likelihood of employees being tricked or manipulated into taking action that leads to a ransomware attack, data breach, or funds transfer fraud.

  • Third-party costs:

Includes defense costs you incur when someone files a claim or lawsuit against your business seeking damages or when a regulator serves you with notice of a regulatory action seeking fines or penalties.

Cyber insurance works by helping you recover from a cyber loss.


  • Silent Cyber under non-cyber insurance policies is not guaranteed coverage.
  • A dedicated Stand-Alone Cyber Insurance policy clearly and affirmatively provides cyber coverage (both first and third parties).
  • Why not allow your business to survive and thrive after a cyberattack with a dedicated Stand-Alone Cyber Insurance policy suited to your cyber risk tolerance level?
  • Cyber Armada Insurance is here 24/7 to help you during the renewal season and beyond.

Reach out to Cyber Armada Insurance to assist you with your Stand-Alone Cyber Insurance needs. We understand the evolving cyber risks and the importance of your investment in appropriate cyber insurance.

Contact Cyber Armada today to explore how your company can solve potential financial losses from a cyberattack. Contact us at 888.727.6232.

Next Article

Please watch for our next articles on Cyber Risk Predictions for 2021.

This article is made available for informational purposes and is not intended to be a substitute for professional or legal advice. No attorney client relationship is formed or implied between you and the authors(s) or Cyber Armada Insurance.

Topics: Stand-Alone Cyber Insurance Renewal 2021 Cyber Risk Management

Cyber Armada Team
Posted by Cyber Armada Team on Dec 9, 2020

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