Great American Insurance Introduces Cyber Risk Policy

March 27, 2009

Great American Insurance Group introduced a new modular policy providing coverage for a variety of cyber risks.

The ISO based-Internet Liability and Network Protection Policy (ILNPP) was developed to protect commercial enterprises, including not-for-profit organizations, from exposures inherent with the use of the Internet as a business tool.

“Practically every organization that has a website and maintains a database of client information has real exposures to business loss, not to mention the regulatory issues that require consideration,” said Jeremy Ong, divisional vice president with Great American’s Alternative Markets Division.

Great American has also contracted with Identity Theft 911 to provide identity theft resolution services to policyholders in the event of a covered loss. Identity Theft 911 is a provider in identity theft resolution and fraud education services. This packaged cyber risk solution covers first and third party exposures.

“Industry data indicates that incidents of data theft have increased substantially year over year. Thieves appear perfectly willing to victimize smaller ‘mom and pop’ operations as well as the larger enterprises,” added Mr. Ong.

The reported average cost of a data breach, according to the Ponemon Institute’s annual study on the U.S. Cost of a Data Breach, is now up to $202 per record compromised in 2008. Consequently, the compromise of even a modest customer information database can result in a sizable business loss, the insurer said.

Great American’s cyber risk insurance includes six separate product modules that may be purchased individually, collectively or in any combination. Included are products for Web site publishing, network security, replacement or restoration of electronic data, cyber extortion, loss of business income and costs associated with computer system unauthorized access notification. Limits of insurance and deductible levels may be customized as needed. A full schedule of coverage and general use endorsements is also available as part of the cyber risk program.

The company’s Alternative Markets Division has started to roll out the new product to currently appointed agents and plans to aggressively expand their distribution channel in the months ahead, the insurer said in a statement.

Source: Great American
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