Seth is editor of The Northwest Policyholder, www.nwpolicyholder.com, the firm’s insurance coverage blog, where portions of this article previously appeared.
Surveys of C-suite executives continually rank cyber-related risks near the top of risk-management concerns. “Phishing,” hacking, and cyber-ransom events are constantly in the news and are affecting companies of all sizes. Regulators are increasingly focusing on what companies are doing to protect themselves from these risks, including what insurance has been procured in case frontline defenses fail. The banking industry is no different and, as a result, cyber-security and cyber-risk management are becoming board-level concerns.
At the same time, bankers are rightly concerned about the resiliency of their customers and business partners from cyber-events. A key component of that resiliency is, of course, insurance. The insurance industry, for its part, is concerned about the scope of financial exposure from cyber-events, and has responded by creating specialized coverage forms to channel the risk toward products that are written specifically for cyber-risk and are underwritten and priced accordingly. Insurers are also pushing back at attempts to obtain coverage for new risks under traditional products.
With cyber-losses becoming a regular occurrence in the business world, litigation between policyholders and insurers about those losses is helping to illuminate some particular areas where vigilance is needed. Continue Reading