cyber risks insuranceWhilst the cyber risk insurance market continues to develop with cover evolving to meet the seemingly ever increasing risks faced to businesses, a report has highlighted significant differences between the cover available from insurers that in some cases could lead to disastrous consequences.

With the basis of many policies being originally in cyber liability insurance protection, this core cover has been developed by providers into a broader product aimed at protecting businesses against both third party and first party risks.

Within the insurance market, more traditional and well established products share much in terms of the cover they provide with individual contracts from insurance companies tending toward being homogeneous. The new research shows that this is not yet the case in cyber risks insurance and highlights some key areas of concern for policyholders. Whilst this information is not provided in detailed form it does draw attention to key areas where policy cover may be inadequate for policyholder’s needs.

  • Policies with an aggregate limit of indemnity where others have a limit in respect of each and every occurrence
  • Reduced and seemingly inadequate inner limits on significant aspects of cover
  • Reduced limits for Crime losses under some policies
  • No Crime cover at all under some contracts
  • Extortion and Ransom restricted to costs and not including any cover for the actual ransom
  • No Phishing / CEO Fraud email cover
  • Exclusions of terrorism where others provide the cover
  • No business interruption cover
  • Cover restricted to cyber attacks where only the insured is targeted.
  • No retroactive date on many contracts

David Burton ACII, Managing Director of Blackfriars said “The differences in cover between the various policies is actually quite shocking and whilst different businesses will place greater importance on different aspects of cover; limitations such as the restriction of cover to a cyber attack that only targets the policyholder is very worrying. I am convinced that there will be policyholders out there who are not aware of this restriction to their policy and will be trading in the belief that the cover is in place.”

No doubt as the market continues to develop many of the issues highlighted will be addressed by underwriters and a more consistent approach with greater transparency will emerge but in the meantime the cover under each policy needs to be carefully considered and checked that the policyholder’s requirements are met.

Further information is available regarding these important aspects of cover upon request.


0161 300 2930 Blackfriars Group