Business Insurance Does Not Typically Cover Pandemics; Your Cyber Coverage May Still Help

Author(s): Logan Rohde

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Many insurance policies cover business interruptions. But after seeing an uptick in such claims during recent epidemics (e.g. Zika, Ebola, SARS), most insurers started excluding cases related to disease, emphasizing instead physical interruptions (e.g. flood, fire, inability to access building).

As such, your business interruption coverage is unlikely to be much help during the COVID-19 pandemic. Your cyber insurance, though, might come in handy when operating with a remote workforce, which is what many organizations have been forced to adopt to keep their team safe.

Remote work changes the ordinary flow of business operations, and – especially when your network hasn’t been designed with remote working in mind – this can create new security challenges. For example, organizations may not be set up for things like mobile device encryption, multi-factor authentication, or even the security of someone’s home network.

This means that as we manage risks to our collective health, our cyber risk management strategies may take a hit. But your cyber insurance policy may offer some support.

While some policies have restrictions or exclusions when it comes to mobile workforces and remote operations, many accommodate them and thus you may be able to transfer to insurance some of the risks associated with a rapid work-from-home transition (i.e. potential vulnerabilities that you didn’t expect to have to manage).

Insurance, of course, won’t fix the problem entirely, but it may help your organization stay afloat during a prolonged period of increased risk. Policies often contain a list of preapproved vendors that can be used to help you respond to and remediate security incidents. This type of support may come in very handy should you find yourself in over your head or unable to manage the challenges of securing remote workers.

These vendors, though, may themselves be in the midst of accommodating COVID-19 counter measures, which may alter their service-level agreements for a time, so it’s important to temper expectations. Be proactive and start looking into what your insurance coverage can help you manage before it becomes an absolute necessity.

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