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20 May 2019
Cyber attacks’ frequency, severity and evolution are accelerating too quickly for the insurance market to maintain coverage, Gallagher warns.
“The global premium pool for cyber cover and the expected risk exposures do not currently correlate,” Gallagher says. “This in in part due to the challenges of gaining an accurate picture of the frequency and severity of cyber losses.”
The lag is causing a threat of underinsurance and exposure.
Shareholders and customers are seeking damages for losses associated with cyber breaches, which may affect directors’ and officers’ (D&O) insurance.
Cyber is now identified as a major risk around business interruption, the broker says.
It warns the risk of cyber attacks is growing, casting a shadow over D&O coverage for C-suite executives because exposure of network security or protocols will damage a company’s ability to maintain shareholder confidence. Reputation and brand may also be harmed.