Beazley and Munich Re, through their Vector partnership, have reported strong demand for “holistic cover” to protect against cyber attacks and resulting business interruption and supply chain risks.
Vector was established in 2015 to offer tailor-made expertise and capacity for the world’s largest and most complex cyber risks, the companies explained.
At that time, most cyber policies only addressed third party liabilities arising from data breaches – coverage that was relevant to firms holding large volumes of personally identifiable customer data such as retailers and financial institutions, Beazley and Munich Re said in a prepared statement.
At the same time, cyber attacks were perceived as less of a threat by many other industries such as large industrial companies and providers of critical infrastructure, they added.
“Since we established Vector, we’ve seen a significant shift in the pattern of demand for cyber cover,” said Paul Bantick, technology, media and business services UK focus group leader at Beazley.
“Every company insured through Vector has sought considerably broader coverage, in particular, for business interruption and contingent business interruption,” he added.
The companies explained that manufacturers seek such contingent business interruption cover to protect their businesses against a cyber attack that brings factories to a standstill.
“While these businesses have traditional property and cyber liability policies in place, they have recognized that they do not have complete protection for cyber-related events and this is clearly an issue that boards want addressed,” Bantick went on to say.
Recent high profile cyber attacks such as WannaCry and NotPetya have highlighted corporate vulnerabilities, the companies said, noting that manufacturers’ greatest fear is a loss of production capability, whether caused by an attack on the company’s own system or on a critical supplier.
“The loss of customers’ personal data is still a concern, and that concern is growing with the coming into force of the European Union’s General Data Protection Regulation next year,” they explained.
Source: Beazley and Munich Re