NU Online News Service, Nov. 12, 3:02 p.m. EST
SAN ANTONIO, Texas--Even though enterprises large and small are losing the battle against cyber attacks, specialty insurers are expanding coverages triggered by computer privacy breaches as rapidly as new enemies emerge to pursue new targets, experts said here.
Tom Srail, senior vice president for the technology practice at Willis in Cleveland, reviewing developments in network liability and privacy protection insurance products, described changes in the coverages as "fast moving."
Speaking at a session of the Professional Liability Underwriting Society International Conference yesterday, he said, "I wish I could put up a standard slide about what the privacy/cyber insurance market is doing. But as soon as I put it up, it would be out of date."
He added, "As fast as the risks and vulnerabilities are changing, the underwriters [are] responding" to what clients want and need. Of particular interest, he said, are coverage enhancements related to costs an insured might incur to notify customers about privacy breaches.
"Several markets now have full limits available" for the costs to send out notices, monitor credit, set up call centers and pay for forensic investigations, he said, contrasting that to the earliest network liability policies that offered $250,000 sublimits to cover these costs.
Now you can buy $10-, $20-, or $50 million in policy limits with the notification and credit monitoring cost coverage offered outside and in addition to policy limits, he said, noting that coverage for voluntary notification is something that can be expressly written into the policy.
Another quickly developing expansion of coverage deals with fines and penalties from regulators or contractual fines from credit card companies when merchants are not in compliance with PCI (payment card industry) standards, Mr. Srail said.
It's a very soft market, he said. Even though the prices may seem dangerously low to some of the underwriter members of the Minneapolis-based PLUS, "there's new premium flooding in every day," he said, noting, for example, that 70 percent of managed care companies and 50 percent of hospitals are purchasing coverage.
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