ABA Offers New Cyber Policy for Banks

PRODUCT: Cyber Cover

COMPANY: Everest National Insurance Company

BEST RATING: A+ (Superior)

AVAILABILITY: Coverage is available on an open-brokerage basis.

FOCUS: ABA Insurance Services offers Cyber Cover, a new cyber and privacy liability insurance policy written specifically for banks. Michael Read, marketing and sales manager for ABA Insurance Services and primary agent contact for the product, notes that ABA introduced its first line of coverage in the cyber niche in 2001 as banks began offering transactional capabilities on their websites.

Now, Read says the policy provides coverage for a wide range of cyber and privacy exposures through three core insuring agreements and six optional coverage components, each designed to protect against a key cyber risk that banks face. All insureds have access to a suite of loss control resources, including a 24/7 data breach coach who can assist in investigating and responding to an actual or suspected breach. This new iteration of the form retools the coverage by affirmatively addressing today’s technology, including cloud storage and social media activity. The form also recognizes the current threat environment and responds to breaches of service providers, as well as denial of service attacks.

In addition, the loss control resources offered in conjunction with Cyber Cover “are a significant value-add,” says Read, who observes that independent agents and brokers who operate in the bank space have to focus on multiple coverage lines, each with their own unique features and coverage nuances. The product is valuable particularly for those who are not cyber insurance experts, Read says, adding that ABA has insured banks for nearly 30 years.

UNDERWRITING: Limits under the coverage up to $5 million are available. ABA may write certain coverage components as sublimits, depending on the insured’s needs and risk profile. All insuring agreement limits are subject to the policy limit aggregate. Annual and three-year prepaid policies are available, subject to underwriting. ABA will consider writing Cyber Cover on a monoline basis if the bank meets certain underwriting guidelines.

Optional insuring agreements under the coverage include: regulatory defense, which provides coverage for defense expenses incurred if regulatory proceedings are brought against the bank in connection with a data breach incident or wrongful cyber publishing act; electronic funds transfer liability, which provides coverage when a demand is made against the bank in connection to the wrongful electronic transfer of customer funds; privacy and security breach response expenses, which indemnifies the bank for professional expenses incurred to remediate an electronic or non-electronic data breach or a denial of service attack; and public relations expense, which indemnifies the bank for expenses incurred to hire a public relations expert to help mitigate the reputation damage to the bank in the wake of an electronic or non-electronic data breach or any other claim covered under the policy. Specimen forms, applications and loss control information are available on the company’s website.

MINIMUM PREMIUM: None.

TARGET: Banks with up to $10 billion in total assets.

COVERAGE TERRITORY: ABA filed the product in all 50 states. It is currently approved in AL, AR, AZ, CO, CT, DE, GA, HI, IA, IN, KS, KY, MA, ME, MD, MI, MN, MO, MS, MT, NE, NC, NJ, NM, NV, OH, OK, OR, PA, RI, SC, SD, TN, TX, UT, WI, WV and WY. For those states where Cyber Cover is not yet approved, ABA continues to use its Internet banking liability policy.

CONTACT: Michael Read, marketing and sales manager; ABA Insurance Services, 5910 Landerbrook Drive, Suite 100, Mayfield Heights, OH 44124; 800-274-5222.

Ronimarie Acord is an IA contributor.