Insurance Cover A CISO Should Consider

While I’m not an employment attorney nor an Insurance Advisor, I have assisted many security leaders in navigating and negotiating their employment agreements. For a Chief Information Security Officer (CISO), specific insurance coverage and liability protections are essential to safeguard against the unique risks associated with the role. These protections are not only beneficial for the CISO but also for the organization, as they help ensure that top talent is willing to take on these high-stakes positions. Here are key types of insurance and liability protections that should be considered:

  1. Directors and Officers (D&O) Insurance: This type of insurance protects individuals from personal losses if they are sued as a result of serving as a CISO or other executive. It can also cover the legal fees and other costs associated with such lawsuits. Ensure that the policy specifically covers cybersecurity-related decisions and actions.
  2. Professional Liability Insurance (Errors and Omissions): This covers legal defense costs and damages arising from wrongful acts or alleged failures in professional services or advice provided. For a CISO, this would include cybersecurity strategies and implementations.
  3. Cyber Liability Insurance: While this is typically for the organization, the CISO needs to ensure that the company’s policy is robust. It covers liabilities associated with data breaches and cyber incidents. The CISO should understand the extent of this coverage, as their actions will directly impact the risk profile of the organization.
  4. Employment Practices Liability Insurance (EPLI): This protects against claims made by employees, such as wrongful termination, discrimination, or other employment-related issues. While more relevant for the organization, it can provide a layer of protection in scenarios where a CISO’s decision might lead to such claims.
  5. Fiduciary Liability Insurance: While this coverage may not be as common if the CISO has responsibilities related to company pension plans or other employee benefit programs, this insurance protects against breaches of fiduciary duties.
  6. Indemnification Clauses: Beyond insurance, the employment contract should include indemnification provisions. These clauses ensure that the organization will cover certain costs and legal fees if the CISO is sued for actions taken in their professional capacity.
  7. Tail Coverage: In case the CISO leaves the company, it’s important to have tail coverage, which extends the reporting period for claims made after the policy period ends. This is particularly relevant for claims-made policies like D&O or Professional Liability insurance. If a CISO voluntarily or involuntarily exits after a breach, this coverage will provide protection.
  8. Personal Umbrella Liability Insurance: While this is a personal insurance policy, it can provide additional liability coverage above and beyond what is provided by the employer’s policies. I carry a $2M policy so I can sleep at night. It’s cheap compared to the alternative. Every security leader should have an umbrella for a rainy day.

The CISO needs to understand the specifics of these insurance policies, including what is covered, any exclusions, coverage limits, and how these interact with their role and responsibilities. Consulting with a legal advisor and/or an insurance professional who understands the nuances of executive liability and cybersecurity risks is advisable to ensure comprehensive protection.

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About Tim Howard

Tim Howard is the founder of 5 technology firms including Fortify Experts which helps companies hire the Best Cyber Talent on the Planet as well as provide expert consulting and NIST-based security assessments

In addition, he has a passion for helping CISOs develop higher-performing teams through coaching, creating interactive CISO Forums, and helping them create highly effective team cultures.

He also teamed up with Lyndrel Downs to launch to help promote the most influential women in cybersecurity and provide a mentoring program to help encourage and support more diversity within the cybersecurity industry.

Tim has been leading technology staffing teams for over 20 years and has degrees from Texas A&M University in Industrial Distribution and Marketing.  

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