Setting the Record Straight on Cyber Insurance – Responsive and Reliable

For almost 30 years, cyber insurance has covered losses and expenses associated with a growing range of cyber perils – data breach, notification cost, third-party liability, business interruption, cyber extortion, reputation damage, and many others. 

As coverage has expanded, more companies are buying cyber insurance and taking advantage of the protection it offers.  Cyber claims and payouts have risen in tandem:  leading cyber insurers report ever-greater claim volume every year, and US insurers paid cyber claims of nearly $400 million in 2018, up 75% over 2017.

So why is there skepticism about the responsiveness of cyber insurance?  Too often, cyber policies are conflated with property, casualty, and crime policies, particularly around how these policies respond to cyber claims.  Many organisations, and media, mistakenly expect cyber losses to be fully covered under non-cyber policies. 

Cyber risk can result in multiple forms of loss not traditionally excluded under property, casualty, and crime policies.  But as insurers see rising claim volume under non-cyber policies, they are closely monitoring that “silent cyber” risk and excluding cyber from traditional insurance lines.

This shows the importance of obtaining cover under an affirmative cyber policy that is tailored to an organisation’s specific exposures and offers the best chance for insurance to respond.  As cyber threats become more economically damaging, and as traditional insurance lines retreat from covering cyber events, affirmative cyber coverage is an increasingly vital tool. 

In this article, we debunk some common inaccuracies and myths around cyber insurance and highlight the many broad and innovative cyber coverages available today. Organisations should look past erroneous myths about cyber insurance and work with a knowledgeable broker to design a standalone cyber insurance program tailored to their unique risk profile.

Marsh Pty Ltd (ABN 86 004 651 512, AFSL 238983) (“Marsh”) arrange this insurance and is not the insurer. The Discretionary Trust Arrangement is issued by the Trustee, JLT Group Services Pty Ltd (ABN 26 004 485 214, AFSL 417964) (“JGS”). JGS is part of the Marsh group of companies. Any advice in relation to the Discretionary Trust Arrangement is provided by JLT Risk Solutions Pty Ltd (ABN 69 009 098 864, AFSL 226827) which is a related entity of Marsh. The cover provided by the Discretionary Trust Arrangement is subject to the Trustee’s discretion and/or the relevant policy terms, conditions and exclusions. This website contains general information, does not take into account your individual objectives, financial situation or needs and may not suit your personal circumstances. For full details of the terms, conditions and limitations of the covers and before making any decision about whether to acquire a product, refer to the specific policy wordings and/or Product Disclosure Statements available from JLT Risk Solutions on request. Full information can be found in the JLT Risk Solutions Financial Services Guide.”