As cyber threats evolve in complexity and frequency, organizations are facing greater risks. Ranging from data breaches and ransomware attacks to operational disruptions. According to Cybersecurity Ventures, the global cost of cybercrime is expected to reach $10.5 trillion annually by 2025, up from $3 trillion in 2015.
For organizations with cyber insurance in place, navigating the claims process effectively is essential to mitigating losses and recovering swiftly. The following framework will guide you through the essential steps when a cyber incident occurs.
Step 1: Notify Your Insurer & Stakeholders Promptly
Upon identifying a potential cyber incident, the first action is to confirm its validity and scope. Once verified, notify your insurer and broker immediately, along with other relevant internal or external stakeholders.
Key Information to Provide:
- High-level summary of the incident
- Initial documentation and evidence
- Preliminary assessment of potential losses
Tip: Timely notification is often a requirement under most cyber insurance policies. Delays may limit or complicate coverage.
Step 2: Engage Appropriate Vendors
After notifying your insurer, begin engaging vendors to contain the incident and initiate recovery. Depending on your policy, vendors may need pre-approval or need to be selected from a pre-approved panel. Unauthorized vendors may lead to non-reimbursable expenses.
Essential Vendors to Involve:
- Legal Counsel (Breach Coaches) for compliance and communication coordination
- Forensic Investigators to assess the origin and impact of the breach
- IT Recovery Professionals to restore compromised systems
- Crisis Communications Consultants to manage external messaging and PR
Step 3: Document Costs & Mitigation Efforts
Accurate documentation of all recovery-related expenses is essential for the claims process. Insurers will require a detailed breakdown of costs to assess the scope of the loss.
Documents to Maintain:
- Vendor invoices and statements of work
- IT purchase receipts (hardware, software, etc.)
- Business interruption calculations (if applicable)
- IT Recovery Professionals to restore compromised systems
- Other relevant expenses (legal, PR, regulatory fines)
Step 4: Finalize the Claim & Review Outcomes
Once all supporting documents are submitted, your insurer will review the materials and issue payment based on your policy’s terms.
Post-Incident Review:
After your claim is closed, conduct a review to identify areas for improvement:
- Root cause of the incident
- Effectiveness of your response
- Financial, operational, and reputational impact
- Gaps in security, governance, or staff training
This review will help refine your incident response plan and ensure that your organization is better prepared for future incidents.
Conclusion
Cyber incidents present serious challenges, but a structured response backed by comprehensive insurance coverage can minimize the impact. By following these steps and staying aligned with your broker and insurer, your organization can navigate the claims process with clarity and efficiency.
