Insurance market Lloyd's of London recently co-wrote a report predicting that a major cyberattack on the East Coast could trigger $70 billion in insurance claims, highlighting potentially glaring deficiencies in traditional and cyber-specific policies.
According to Law360, the report noted a number of unique challenges insurers face in trying to predict and model cyber risks in order to tailor insurance products, including the evolving, dynamic nature of the threats. However, the study concluded that cyberattacks are not "unlimited or infinitely scalable."
Joshua Gold, an Anderson Kill PC shareholder and cyberinsurance attorney, said that he agrees that cyberthreats are dynamic but parted ways with the report's assertion that such risks are relatively new.
"The insurance industry has been dealing with claims involving computer-related problems such data destruction and loss and business interruption to some degree since at least the 1980s," Gold said.
The report also highlights the importance of policyholders closely scrutinizing specialized cyber policies, as they may not cover as broad a range of risks as buyers may hope, attorneys say.
The insurance industry's current approach of rolling out a new product every time there is a "supposedly 'new'" cyber peril that the industry is uncomfortable with "would be a terrible model going forward. Having to fill that coverage gap by constantly buying a new insurance product is bad customer service," he said.