Even Beyond Cyberinsurance, Inconsistency Grows Over Insurer’s Breach Coverage Liability

A recent district court ruling highlights that in the aftermath of a cyber attack, even non-cyber insurance policies could be required to pay up even if there’s no “direct physical loss.” Courts around the country have differed over finding no direct loss is covered by an insurance policy. Cyber Liability Insurance attorney Thomas Bentz shares that courts will likely remain inconsistent as insurance companies’ policies vary. 

“This is a new issue; it’s been inconsistent and it’s going to be,” Mr. Bentz said. “These cases have low precedential values, from one policy to the next you have different forms and carriers.”

“Most carriers have made changes to their liability claims. Some have made it clearer they won’t provide that. Insurance providers are attempting to make policies that are general enough that it makes sense but at the same time keeps it off of the other lines of a policy where appropriate. I don’t think we’ve come up with the right formula yet.”

READ: Even Beyond Cyberinsurance, Inconsistency Grows Over Insurer’s Breach Coverage Liability (Subscription required)