Cyber Insurance More User Friendly

Cyber Insurance More User Friendly

November 12, 2018 Business Insurance and Risk Management, The Beacon Blog 0 Comments

One of the main obstacles to more widespread acceptance of “cyber” insurance is that not only does each insurer have its own form (since one size does not fit all risks, this is probably not likely to change) but the forms are complicated and difficult to read. It is therefore a hopeful sign that Beazley, a major cyber insurer, has made significant improvements to its Breach Response form.

While Beazley has offered broad coverage in the past, previous editions of the coverage form were a challenge. It was 32 pages long and filled with cross-references from one section to another. Insureds who wanted to cover first party losses had to buy an additional 10 page endorsement.

The revised coverage form is 23 pages long, and includes first party loss in the insuring agreements. It includes “eCrime” coverages such as fraudulent instruction. Breach response costs have a separate limit outside the policy aggregate. Coverage for “consequential reputational loss”  (loss of income due to coverage of a data or security breach) is available by endorsement.

Just as important, policy language is simpler and less detailed. As with every “cyber” policy, the devil is in the definitions. Beazley has over 50 in the revised form, but they are easier to understand and as likely to expand as restrict coverage.

 

While it’s too early to know if other insurers will follow Beazley’s lead, this should make organizations that have not purchased cyber insurance more receptive to investigate. If you do not have cyber insurance or are dissatisfied with your current policy, Beacon will be glad to review your exposures and recommend broad coverage.




About the Author

Harry Cylinder

Harry Cylinder, CPCU, ARM has spent nearly fifty years in the insurance industry, the majority of the time as a consultant. He has been employed by The Beacon Group of Companies since 2008, specializing in the review and analysis of property and casualty coverage forms. Mr. Cylinder has been reviewing policy forms as they have evolved over the past decades. In 2008 he published an article in the CPCU Journal which was the first description of cyber insurance coverage for a general insurance audience. Since that time he has regularly written on cyber and other topics for The Beacon Companies’ blog.