KDOI explains cyber security insurance

TOPEKA, Kan. (WIBW) - As cyber attacks increase in frequency and severity, new ways to counter the effects are taking shape.

“It’s not if, it’s when,” says Vicki Schmidt, Kansas insurance commissioner. “It’s like Whack-a-Mole. I mean, you’re just trying to stay ahead of, ahead of the game.”

Schmidt highlights the risk of cyber incidents and the need for protection against them. Especially as incidents occur more frequently, often targeting sensitive data.

“I think we’ve seen that in the healthcare space and with health insurance companies,” she says. “So think about your personal information, you know, your name, your address, your social security number, your credit card numbers, your PPI, your protected patient information, all those things can be affected.”

Recovering from a cyber incident can be a serious financial burden.

“I think the estimates are always billions of dollars on what it takes to fix it,” says Schmidt.

That’s where cyber insurance can help.

“It’s a real problem,” Schmidt says. “I mean, $9.7 Billion of cyber security insurance premiums have been written in the U.S.”

Kansas is among many states chipping away at cyber security legislation, this year passing a bill to protect funding for cyber security insurance policies.

Schmidt says small businesses often overlook cyber insurance or think it’s included in their general liability policy.

“Many times the cyber is excluded from the liability coverage so you need the separate cyber insurance protection,” she explains.

Some policies might have exclusions.

“They’re individualized by the policy,” Schmidt says. “You have to know that you’ve got the coverage that you think you do.”

As for individual cyber insurance policies, Schmidt says they could be on the horizon.

Right now there are 60 companies licensed to sell cyber security insurance policies in Kansas, though it’s not clear if they are doing so.

Schmidt added you should be wary of anyone offering you personal cyber protection, especially over the phone.