1. Cyber Exposures The Importance of Risk Identification and Transfer
Presented By: Joe Weipert

2. The Complexity of Cyber Risk and its Severity
My Goal Today: Getting Your Attention in 30 Minutes
Average Claim Loss Costs by Line of Business*
Property: $44,800
General Liability: $26,400
Workers’ Compensation: $10,200
Auto: $6,300
Cyber Errors & Omissions: $250,000 Defense Only!
Does not include damages payment.
Bottom Line: More Complex and Higher Damages Exposure.
More Significant and Catastrophic Potential
*Data from Hartford Technology

3. Understanding the General Liability Policy
Where to Start?
What does it cover?
Bodily Injury: Understand the definition, does it include Mental Anguish?
Property Damage: Tangible v. Intangible
Data? Beware if you host data!
Personal Injury: Other than Bodily Injury - Includes Libel, Slander, Defamation, Invasion of Privacy
Advertising Injury: Advertising “your” goods and services. Infringement of Copyright, Libel, Slander
Limitation: Print media?

4. Beware of General Liability Exclusion and Sublimits
What is a policy exclusion?
Do you know and understand the exclusions attached?
Professional Liability?
Internet Access Provider?
Breach of Contract?
What is the purpose of exclusions?
What is a policy sublimit?
Limits recovery
Buy additional limits?
Good or Bad?
Not a Solution!

5. Understanding a Professional Liability (Cyber)
Purpose: Compliments the CGL policy and its limitations.
Claims of a third parties financial harm.
AKA: Errors & Omissions Coverage
Technology E & O
History
Beware: No two forms are the same!
Some companies have multiple forms.
Failure of Products or Services
Personal Injury
Cyber Liability: What is the difference?
Hybrid Forms

6. Other Professional (Cyber) Exposures
Consulting
Installation
System Integration
Warehousing of Data
Administration, management, operation or hosting of another party’s systems, technology or computer facilities
Internet access and connectivity services
Telecommunications services
Telecommunications products
Enhanced Telephone services
Activities on your own website!

7. Professional Liability Claim Examples
University of Utah Hospital and Clinics
Data Storage Employee returning to storage facility.
1.5 million patient records breached.
Hospital incurs $3.4 million in costs associated with breach.
Credit monitoring
Notification
Phone Bank
Damage to reputation
$30 million lawsuit.

8. Professional Liability Claim Examples
Hewlett-Packard Corporation
Theft of a laptop
196,000 current and former employees personal financial information (BYOD: Be Careful!)
Citibank
UPS “misplaces” a box of computer tapes with personal information of 3.9 million customers

9. Professional Liability Claim Examples
ISP – Contributory Trademark Infringement
ISP offers to link local author’s book from ISP’s website. Author violated copyright on his book. ISP sued for Contributory Trademark Infringement
ISP Sued for Defamation
Based on statement’s by a customer on a bulletin board. ISP failed to monitor or censor forum.

10. Data Breach Examples What do they have in common?
Personal Health Information and Personal Financial Information
Employees
Customers
Third Party Information
Regulatory – State, Federal

11. Preventing and Mitigating Losses
Caution:
Warranty Statements
Misrepresentation
Contract Review
Services agreeing to perform clearly stated
Ask a lawyer to review
Familiar with contracts
Beware of generic contract forms
Identify all parties
Third parties, subsidiaries

12. Preventing and Mitigating Losses
Contract Review
Do you have a remedies provision?
Breach of Contract – how to terminate a contract
Goals:
Risk Transfer
Manage Customer Expectations
Privacy Statement
User Agreements

13. Risk Retention v. Risk Transfer
Funding losses
They will happen
Understanding exposure
Risk Assesment
Retaining risk
What risks?
How much?
Best practices?
Risk mitigation
Transferring risk
What is your goal?
Understand the product?
Seek out an expert?

14. Risk Transfer Contract Control – 1st line of defense
Technology Errors and Omissions Liability Policy – May be your most important policy
What is the goal?
Identify the proper form to use
3rd party coverage
1st party coverage
Beware of Exclusions (Breach of Contract)
Claims made policies
Claims made and reported
Don’t rely on your Umbrella policy
Know your risks & Understand your coverage

15. QUESTIONS? Joe Weipert, ARM, CIC Sr. Vice President 402-434-7270