Cyber Insurance for the Breach Detection Lag

Posted July 27th, 2018 in cyber insurance, data breach

Do you know there is often a lag between when a network breach occurs and when it is discovered. Hackers get access to your Network and then bide their time before they do attack your business.

Unfortunately, some cyber insurers will not pay for the costs of a breach that occurred before the policy started, even if you aren't aware of it at the time your buy their  insurance.  

Here’s how it works:

Generally cyber insurance policies respond to incidents on a “claims made basis” meaning the policy is triggered from the time when the insured first became aware of the circumstances that have led to a claim.

However, Insurers also include something called Retroactive Date.

This is usually set at the same date that the policy starts. It’s aimed at ensuring the Insurer is not providing customers cover for incidents that occurred prior to them buying a policy, which seems fair on the surface.

However, a Retroactive Date that coincides with the start date of the policy provides a unique challenge when it comes to Cyber Insurance because of the detection lag.

If you have  a breach but aren't aware of it, buy a cyber insurance policy and then discover the breach afterward, most Insurers won’t cover your costs because the breach occurred prior to start of the policy and the Retroactive Date.

Whilst Edmund has a Retroactive Date in our policy, we automatically set it 12 months before the start date of the policy. This means that if your are breached, buy Cyber Insurance policy with Edmund within 12 months then subsequently discover it for the first time, we provide you cover to the full extent of the policy. 

It seems trivial and something you would expect most Insurers to do, but they don't. As a specialist Cyber Insurance provider it's these details that set us apart from the others.

Edmund makes sure you are Insured when you expect to be.