Lost in all the chaos that is cyber breaches, social engineering and phishing seem to be the hidden problems with coverages. Many liability coverages were made when cyber coverage was an afterthought and now, with the increasing risk associated, many insurers are facing increasing costs to cover.Silent cyber coverage occurs when there is ambiguity and vagueness in a cyber coverage. This stems from a traditional liability coverage which covers damages to property and other liabilities. These include company computer, routers and other physical items. When a cyber breach occurs, it becomes a question of what is covered and often the GL carrier pays out due to the vagueness. This results in higher premiums and potentially exclusions from future coverages.
Many people have their own opinions on this issue. Johnny Fraser, a cyber insurance broker at Capsicum Re, spoke on this topic at a Cyber Risk summit in London. ““I think it’s interesting the industry still calls it silent cyber. I think non-affirmative cyber is probably a more accurate description for the cyber peril. I think silent cyber is probably something that was a more accurate description six or seven-years-ago when the industry didn’t perhaps place enough emphasis or attention on cyber exposures across insurance lines. In light of recent losses, regulatory emphasis, management board level attention, and media attention, there’s an acknowledgement that non-affirmative is probably a better way to describe the peril.”
In short, professional liability insurance has been significantly behind the times when it comes to cyber coverage. With renewals occurring annually, many companies are struggling to juggle how much coverage they need on a PL policy while at the same time carrying cyber insurance. Speak to your carrier and see how to adapt your policy to the changing times.