Cyber-related business interruption quickly became a top issue in 2017 as high-profile ransomware attacks demonstrated that just about any company can be victimized.
A panel of experts speaking on Advisen’s cyber risk trends webinar last week discussed the impact cyber-related business interruption (BI) claims have had on the insurance industry.
“This is probably one of the top issues facing clients in 2017,” explained Stephanie Snyder, SVP & national sales leader, cyber insurance at Aon. “It’s something that every company needs to consider, cyber insurance is not just about data breaches, it’s much broader than that.”
One challenge for insureds is a lack of consistency in policy wording for business interruption under a cyber policy.
“The language varies on cyber policies that cover BI or network interruption losses,” said Paul Miskovich, SVP cyber product, Axis Capital. “This is one of the biggest issues in general about cyber policies, I think we’re getting closer to getting more consistency but we’re still far away.”
Miskovich is concerned that the inconsistencies in policy wording can lead to bigger challenges down the line.
“What happens is that excess markets who underwrite or offer coverage aren’t pricing themselves appropriately for the coverage that exists on the primary market,” said Miskovich. “My fear is when we start to experience larger losses you are going to start to lose capacity very quickly.”
Snyder agreed and took it a step further, saying business interruption coverage under property policies is also inconsistent.
“Most organizations already buy a property policy recognizing some type of tangible loss. There have been extensions in the property market by some carriers that will also pick up the non-physical damage business interruption and data restoration,” said Snyder.
Josh is an Editor at Advisen in the Research & Editorial division. He is the lead editor responsible for several of Advisen’s Front Page News editions and he also originates custom research on behalf of Advisen’s largest insurance company clients. Contact Josh at [email protected].
