NEW YORK—There’s nothing like the prospect of building another World Trade Center tower to train the mind on issues around property insurance, especially when it comes to cyber risk.
“Yesterday, I got the news that we’re building Tower 2,” said Shari Natovitz, senior vice president and director of risk management for Silverstein Properties/World Trade Center Properties and chair of Advisen’s fourth annual Properties Insights Conference held downtown on Thursday.
“That’s $2 billion to $2.5 billion in capacity,” she added.
Her company agreed Tuesday to the basic terms of a lease with 21st Century Fox and News Corp. for space at Two World Trade Center and, having found anchor tenants, decided to commence construction “above grade” on site north of 1 WTC, she said.
The new tower would be the final building planned for the 16-acre site in a downtown that—since the Sept. 11 attacks—has grown to include more than 800 technology, advertising, media and information companies, according to a statement from Larry Silverstein, chairman of Silverstein Properties.
But while capacity and pricing in property and terrorism insurance markets is favorable, coverage for resulting damages to property from cyber attacks is not, Natovitz told the audience of more than 300 property insurers, brokers and risk managers.
“These policies have not caught up with reality,” she said.
The three coverages—cyber, terrorism and property—exist in separate spaces, she told Advisen on the sidelines of the conference. Cyber excludes direct damages to property from an attack from coverage, while the other two exclude resulting damages from a hack.
“None is appropriate for ‘smart’ office buildings, which is the way we live now,” she said of buildings in which operations are increasingly controlled through technology. “Property insurers need to reevaluate the situation.
“I want something seamless,” she said.
“I have cyber liability,” Natovitz told the audience earlier. “Lots of us have smart buildings, which allow outside vendors to connect with our security systems. Home Depot was a different kind of attack, but they got in through vendors.
“My head of operations and I are sitting down and going through scenarios. If they hold the building hostage, we’ve got that covered. But what if they open the sprinkler system?
“Property and terrorism policies have exclusions for that,” she said.
