Cyber liability insurance is a highly sought-after protection for businesses across an extensive range of industries. The cyber insurance market is fraught with emerging hazards as underwriters and carriers struggle to gauge the scope of continually changing risks, and contend with exorbitant claims. Here are some ways that shifting dynamics in the cyber marketplace are becoming problematic for insurance companies and their clients.
Growing Liability Concerns
Legal developments in cyber security are giving insurers considerable reservations about risk. Class actions and staggering judgments have dramatically redefined the foreseeable consequences of a typical claim. Also, new legislation has identified clear liabilities and obligations on behalf of companies that handle consumers’ personal information. The way that companies manage the aftermath of a breach could ostensibly increase their potential liability.
Stringent Screening Criteria
Regrettably, businesses with both modest and considerable operating budgets commonly fail to allocate sufficient resources to cyber security. The painstaking protocols that companies need to implement to defend themselves strategically can be rather costly and require advanced oversight. If a company has insufficient security initiatives, it could represent a bar to coverage.
Current market trends and conditions are making cyber liability coverage more expensive and exclusive. Agents need to be ready to guide their clients through new challenges.
