Chapter 1 Flashcards
Define insurance
A contract in which one party, the insurer, for monetary consideration agrees to reimburse another, the insured, for loss or liability for a loss on a define subject caused by specified hazards or perils
Define risk
The chance of loss. Specifically the possible loss or destruction of property or the possible incurring of a liability.
Define speculative risk
Possibility of either financial loss or financial gain exists
Define pure risk
A situation involving a chance of a loss or no loss, but no chance of gain
Out of speculative and pure risk, which one is insurable?
Pure risk
What are the three types of insurable risks?
Personal risks
Property risks
Liability risks
Explain personal risks
Personal risks encompass the chance of loss arising from a persons own bodily injury, loss of life or loss of income because of any of the following:
Death
Physical disability
Old age
Unemployment
Explain property risks
Property risks encompass the chance of loss arising from the destruction of or damage to property
Explain the difference between direct losses and indirect losses
Direct losses are those involving damage or destruction of the property insured
Indirect losses occur because of direct losses
Explain liability risks
Liability risks, encompass the chance of loss arising from an individuals obligation to pay damages because of the injury or death of another or damage to another’s property.
What are the three different classes of insurance?
Personal lines
Commercial lines
Special risks
Define cyber risk
Any risk of financial loss, disruption of business, or damage to an organizations reputation due to a failure of its information technology systems
What are the three general categories for cyber risk?
Delivered and unauthorized breaches
Unintentional or accidental security breaches
Operational IT risks
What are the three main reasons threat actors might target a company?
- corporate espionage
- To steal private data
- To steal money
Explain first party exposures
First party exposures are those that affect the company directly
What are the first party exposures associated with cyber incidents? (Expenses)
Event expenses
Extortion expenses
Restoration expenses
Regulatory expenses
Business interruption
What are some of the expenses companies incur under the category event expenses?
Breach coach
Forensic investigator
Notification cost
Crisis management cost
Extra expenses
Explain extortion expenses
Arise in cases of ransomware
Explain restoration expenses
Data that are stolen or corrupted often need to be re-created. Restoration expenses are the cost of restoring the network and data to the point they were before the event occurred
Explain regulatory expenses
Are the cost of retaining counsel to appear with company representatives and to help them prepare for regulatory proceeding
Explain third-party exposures
The third-party information that companies collect. Such as contact information, birthdates, and credit card information.
What are some areas that fall under third-party expenses?
Privacy breach
Internet media liability
Network security liability
Technology errors and omissions liability
Define privacy breach
The unauthorized collection, disclosure, use, access, destruction, or modification of personal information
What typical exposures fall under Internet media liability?
Libel, slander, and defamation
Intellectual property rights infringement
Invasion of privacy rights
Explain network security liability
Losses occur due to the unauthorized access to, degration of, or disruption to a network perhaps through malware, a denial of service attack or a phishing scheme. This not only affects the company itself, but often it can also affect others (such as customers)
Why is cyber risk an increasing threat for Canadian consumers and businesses?
Canadian spend more time online
Canadians are unsure how to protect themselves from cyber risk
Businesses increasingly need technology to function
Attacks target small to medium-sized enterprises
Legislative changes require mandatory data breach notifications
