From the Front Lines: Cyber Liability

Jay Byrnes

President
Byrnes Agency, Inc.
Dayville, Connecticut

How did you get started at your agency?

The agency was founded in 1932 by my grandfather. My father worked for the firm and then I joined after graduating from college. We have two offices in the northeastern part of Connecticut. I’m also involved with the Big “I” as the chair for the Agents Council for Technology Committee.

Why cyber?

I really believe in the threats of cyber liability. Many agents and many of our customers fall into a false sense of security and think only large, multinational companies are at risk. That may have been true many years ago, but you can’t assume that just because you’re a small business, you’re not on a cybercriminal’s radar. Even as individuals, we have exposures.

Biggest cyber changes?

It used to be a very complex product to present to a client. It used to be a very tedious process as far as getting an engaged client to complete it, and often they didn’t have all the information in front of them because there were such specifics regarding the different routers and servers. The whole delivery of what was an exotic product was much clunkier and clumsier several years ago.

Today, underwriting is still as strong as it was, but the process has become very streamlined. That makes it a little less intimidating for the client and, as an agent, it’s a lot easier to present it with just a couple of questions.

Biggest cyber challenges?

It’s just the assumption among our clients that they’re not at risk because they’re not a big company. As agents, we really need to be advocates of this coverage to make sure our customers understand that they are vulnerable—that they really don’t want to be in the position of notifying clients that there was a breach and dealing with that reputational damage.

Then, of course, now there are so many regulatory issues agents face. Most states already had some kind of consumer protection regarding cyber, but now, states like New York and South Carolina are putting a finer point on our responsibilities as stewards of critical information for our clients—date of birth, license numbers, social security numbers. These are all high-value targets, so it’s very important from the standpoint of being good stewards of that information that we put up roadblocks and obstacles to thwart someone who’s trying to come in and steal it.

Future of cyber?

We’re starting to see more companies put in cyber sublimits on non-cyber policies, similar to what you see in the EPLI space. It’s certainly a liberalization, and it’s better than nothing, but it’s not true cyber insurance. One of the big risks out there right now is cyber extortion, but it may not be included in a freebie coverage. It’s nice having that base product, but be wary that the coverages found in a true cyber policy are going to be a lot more expansive.

We’re starting to get calls from clients who are having cyber issues, and now they’re looking for insurance solutions. It’s unfortunate that this is happening all the time, but it’s going to shed more light on cyber liability, and it’s one more way for independent agents to be good, consultative risk managers for our clients. These threats aren’t going away.

Cyber advice for a fellow agent?

Get familiar with the Coalition product, and take advantage of Big “I” resources in general. The Agents Council for Technology makes a number of tools available as part of your Big “I” membership. If you don’t know where to start, those tools will get you engaged.

Will Jones is IA assistant editor.