Comprehensive Cyber Insurance Policy for Schools in Michigan
Schools are prime targets for cyberattacks due to the sensitive data they handle, including student records, financial information, and staff details. Below are key aspects that a cyber insurance policy for schools should cover:
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by Benjamin Thomas
Essential Coverages for Schools
Data Breach Coverage
Covers costs for notifying affected individuals (students, parents, and staff). Includes credit monitoring services for those impacted. Covers legal defense and regulatory fines related to data breaches.
Cyber Extortion Coverage
Covers expenses related to ransomware attacks, including negotiation and payment (if allowed under law). Includes costs for forensic analysis and system restoration.
Business Interruption Coverage
Covers lost income and extra expenses incurred during a system outage due to a cyberattack.
Privacy Liability
Protects against claims from mishandling or unauthorized disclosure of sensitive student and staff information.
Technology Errors and Omissions (E&O)
Covers liability if a school's technology systems fail or lead to a disruption in services.
Additional Recommended Coverages
Media Liability
Protects against claims related to digital content, such as copyright infringement or defamation.
Social Engineering & Fraud
Covers losses from phishing or other schemes that lead to unauthorized transfers of funds.
Network Security Liability
Covers costs if a breach in the school's systems causes harm to a third party (e.g., another connected organization).
Regulatory Investigation Coverage
Includes coverage for costs associated with defending against investigations and fines imposed by regulatory bodies.
Policy Limits and Retention
Adequate Policy Limits
Recommend a policy with a minimum of $1–5 million coverage, depending on the size of the school and the sensitivity of the data they handle.
Retention/Deductibles
Ensure the deductible is manageable for the school without compromising the policy's breadth of coverage.
Vendor/Third-Party Liability
Covers liability from breaches originating from third-party vendors (e.g., the MSP or software providers).
Specific to Michigan and Schools
Compliance with Michigan's Data Breach Notification Law.
Coverage for legal defense and fines under FERPA (Family Educational Rights and Privacy Act).
Cyberbullying response and digital crisis management (increasingly relevant for K-12 institutions).
For Your MSP
Proof of Insurance
Provide a Certificate of Insurance (COI) verifying coverage.
Vendor Endorsement
Ensure the MSP is included as an additional insured or listed as a covered vendor on your policy.
Complete Risk Assessment
Schools should perform regular risk assessments to align their policy with their exposure.