Changes to Requirements for Cyber Security Coverage

According to the Federal Trade Commission, cybercriminals cost the United States billions of dollars, and of all the threats, ransomware is the most ruinous. Some industry experts have named 2021 the “tipping point” year for ransomware payments, which has pushed insurance carriers to reevaluate how much coverage they offer and at what price.

What Are Ransomware Attacks?

Ransomware — when hackers invade the computer system of a business, hospital or other entity — encrypts vital information on the system and then demands a ransom in exchange for a decryption key.

“The magnitude of the threat, the potential damage it represents to PDRMA members and the increase in the cost of cybersecurity coverage is a reality we’re currently working to address,” explains Tim Conlon, PDRMA Property/Casualty Program Director. “The bottom line is each agency needs to be able to prove it’s taken appropriate steps to protect itself against cyberattacks.”

Beazley Group, which provides our cyber liability coverage, has already notified PDRMA that blanket coverage for all members will no longer be available. Instead, each agency will have to qualify for individual coverage. To determine whether a member qualifies for coverage, it must demonstrate the capabilities of its cybersecurity controls and complete an online Beazley renewal application.

What To Do?

We’ll keep you informed as we learn more about Beazley’s coverage requirements and online application, as well as the resources and subsidy PDRMA is developing to help members meet the new cyber requirements. Look for cybersecurity updates arriving in your inbox next month!