Expert Accounting Services for Your Business

Cyber Claims

Insurance claims arising from a cyber related peril have become more complex as a result on the various coverages that may apply. From a claim preparation perspective, cyber exposures falls into two categories: business interruption and restoration, and they are interrelated. 

Business interruption is a time element loss similar to that from a property trigger. When an incident occurs that affects operations and production, the loss of earnings that results may be covered. The time element considers the time of restoration i.e. time it takes to get back to pre-loss levels. This includes the extra expenses needed to keep the operation running. In addition to lost sales, there may be a loss of customers or contracts that should also be assessed.

The restoration involves both the costs and steps needed to repair and replace damaged hardware and software systems necessary to restore operations back to pre-loss levels. How long that takes is your period of restoration. Restoring critical systems may involve various outside consultants to implement the restoration plan and these costs should be included in your claim.

Choosing the right firm for your cyber loss can be difficult especially given the unfamiliarity most have with these claims. In our experience the claims process is similar to a property claim as far as documentation and calculations. However, getting access to the documentation and aligning it with the policy can be challenging. In the end, a well thought out and well prepared claim will make all the difference.