Data breach software firm ID Experts has partnered with risk management and claims consultant Enquiron to offer the Virtual Privacy Expert, an on-demand website service for insurance carriers looking to provide online privacy tools to their clients in conjunction with cyber insurance.
Virtual Privacy Expert includes a proprietary risk assessment application called Breach HealthCheck, which analyzes a company’s risk, customizable privacy and security policies, and a data breach incident response plan. Additionally, the Virtual Privacy Expert provides direct access to privacy experts.
Virtual Privacy Expert is designed for use by businesses across all industry classes. It promises update its best-practice privacy policies and procedures for industries as new risk factors emerge.
Jeremy Henley, insurance segment executive for ID Experts, says one of the most important features of the Virtual Privacy Expert is the risk assessment tool that evaluates a business’ risk of a cyber breach and where its vulnerabilities lie. Enquiron can then work with the company to minimize the company’s risk.
Henley says the Virtual Privacy Expert is different than the typical privacy tools carriers employ now because of the risk manager relationship that is available with Enquiron, which helps to ensure policyholders are actively managing their risk.
“Other services just list a bunch of vendors who offer [cyber breach service] discounts but don’t provide any actual services to the policyholders,” says Henley. “They are also complicated to use and a lot of times companies go to the site one time after they sign up and never return. They don’t actually use the service to reduce their risk of a data breach.”
Henley says ID Experts wanted to create a website that is easy to use and provides tools that reduce the risk for the user, and make sure policyholders take advantage of it.
Henley says one of the ways his company will ensure usage is through Enquiron’s relationship managers, who contact policyholders directly if they haven’t signed up or are having issues. Enquiron says this approach has been successful in the employment practices liability space, where the usage rate is 65-75 percent among Enquiron’s clients.
The cost for carriers to use the service depends on the number of policyholders. Two options are available – either per policyholder or a percent of premium.
Henley says more proactive services like this will become important for carriers as they look to differentiate themselves in the cyber liability marketplace and protect their own bottom line from claims.
“One of the underwriters we work with told me the price of entry to get into the space is you have to have something to offer – like a risk management program – or you can’t have a policy,” he says. “And as claims come in, carriers want to see which policyholders are low-risk. There is very little information available to carriers right now about how risky policyholders are.”
Part of the reason for that, says Henley, is the amount of premium in the cyber space currently doesn’t allow for thorough underwriting, particularly among small and medium-sized businesses, which Virtual Privacy Expert is particularly targeted towards.
“Small businesses don’t want to pay the money for someone to dig deep and really understand their data breach risk so they just don’t do anything,” he says. “I think what we can do is meet in the middle. [Virtual Privacy Expert] is not a high level assessment but it gives them an analysis and it’s much better than doing nothing.”