Cyber Insurance in Disarray

To say that the insurance market for computer-related perils is in a state of flux is putting it politely. Insuring information assets and covering risks from doing business
online has never been more challenging. Policyholders are offered a dizzying array of incomplete, untested and sometimes incomprehensible specialty insurance products supposedly designed to cover this area of risk. Worse still, they are expensive and finding the desired limits can be daunting. So how did we get to this point?

Over the last 10 years, so-called “cyber” risks were covered under a policyholder’s existing insurance program. Some manuscript insurance policies actually provided express coverage for loss from, or damage to, software, hardware, programming and other computer hazards under “all risk” provisions. Few liability and property policies contained exclusions aimed at computer perils. Some insurance companies added cyber coverage into their existing product line. General liability policies continued their personal injury and advertising injury coverages, which protected against a host of internet risks, including domain name disputes.