Regulatory Compliance & Cyber Insurance from Advisor Armor - “We thought that should be a thing”
Under the proposed SEC Cybersecurity Risk Management Rules, firms would need to have documented processes in place to mitigate and respond to “significant cybersecurity incidents” and report them to the SEC when they happen—including whether any losses are covered by insurance policies…
Demand for cyber insurance is growing, according to the U.S. Government Accountability Office. Insurance customers opting for cyber coverage jumped from 26% in 2016 to 47% in 2020, according to the agency. At the same time, the costs of cyberattacks nearly doubled, according to the GAO. With the rise of attacks, including those using generative AI, the risks to advisors, and their clients, grow daily.
These policies are different than an advisor’s typical E&O (errors and omissions) insurance, which largely covers inadvertent but costly advisor mistakes. A standalone cyber insurance policy offers the most comprehensive coverage. An E&O policy would often only cover a liability claim in which an advisor was negligent in protecting a client’s financial data.