News Article

Are you sure your business is insured against a cyber-attack?

Are you sure your business is insured against a malicious or non-malicious cyber-attack? When was the last time you read your policy’s wording to check what it says?

Have you asked your insurance broker to confirm exactly what your business situation is? As a business owner, you ought to be asking all these key questions.

Quite simply, in some policies, if cyber is found to lurk anywhere within the chain of causation behind a loss, there could be a refusal to pay out. For example, if fire damage resulted from a hacker’s actions – a cyber-related cause.

A marine cargo policy may similarly refuse to pay out if damage to a vessel resulted from malware disrupting its GPS-guided navigation systems.

The wording of many policies is ‘silent’ and ambiguous as to whether cover is provided. Putting it simply, insurance policy wording has not kept pace with the increasing sophistication of cyber criminals’ tactics.

Cyber criminals can inflict losses on computer hardware, software, infrastructure, property, manufacturing systems and global supply chains, to name but a few possibilities.

The Prudential Regulation Authority (PRA) became concerned about silent cyber within policies and recognised that the wording of many policies could be interpreted in different ways, leaving both insurers and those insured in potential financial jeopardy when claims arose.

As a result, changes have now been implemented by the insurance industry.
Business owners, directors and senior officers need to be aware of these changes and take steps, with an expert’s help, to ensure their business is covered for any cyber-related losses. Work with your insurance broker to identify what the policy wording now says and what the ramifications of the wording might be.

You should also note that some wording, introduced to now exclude cyber risks, could also, unintentionally, create other gaps in your cover. Reviewing your new wording is essential.

This highly complex area of risk needs a professional broker’s insight and requires a thorough examination of exposures. Standalone cyber insurance policies come in various guises and not all will offer the comprehensive safety net that businesses require. Talk to your broker and ensure you plug all the gaps in the right way.

For more information about cyber insurance or to review the cover of your risks, please contact Nigel Kennedy at Rees Asley on 07951 120328 or email nkennedy@reesastley.co.uk

Rees Astley Insurance Brokers Ltd is authorised and regulated by the Financial Conduct Authority.

 

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