The rise of cyber claims has become a significant issue in the insurance industry, with insurers, brokers, and insureds all trying to navigate the complex landscape of cybersecurity risks.
As cyber continues to be a hot topic within the insurance space, IBTV interviewed two experts to discuss key trends impacting the market.
In terms of cyber trends in Canada’s legal landscape, insurance lawyer Eric Dolden talked about how clients and customers have a right to sue for damages if their network system is intruded on by a foreign actor, “whether they're just snooping to look at the data on your system or they exfiltrated outwards to a foreign actor.”
“Canadian judges have adopted the view that you can recover general damages simply because your privacy and has been infringed upon or compromised,” he said.
Dolden, who is a partner at Dolden Wallace Folick, also highlighted the increasing number of cyber class actions in Canada and class actions that are certified.
“Class counts have realized that if they're complaining about the loss of the same type of personally identifiable information among all the clients and customers that were affected, they can certify a class action and that can be very expensive for a business,” he said.
Additionally, Dolden made note of how remedies for privacy breaches in Canada have previously been made on a patchwork basis through judge-made remedies and provincial legislation, stating Canada is now “at a turning point” in this regard with Bill C-11.
“That is going to be new federal legislation that in essence says anyone who is affected by a privacy breach has a right to sue for damages,” he said. “And that's going to provide consumers, your clients and your customers with a very powerful remedy in the event that your network system has been compromised.”
As for the broker side of the cyber market, Shiraz Saeed, vice president, cyber risk product leader at Arch Insurance, brought up the prevalence of claims involving ransomware, phishing or business email compromise, and privacy disclosure.
Among these issues, he drew particular attention to ransomware, noting how this attack can cause business interruptions that also directly impact individuals.
Saeed pointed to the 2021 attack on a major US fuel pipeline that caused gasoline shortages across the country’s eastern states.
“It ended up having gas stations closed in certain areas,” he said. “So when that hits home like that, I think that's where that disruption of operations is really what concerns the government and should concern businesses.”
Watch the full interview to learn more about key trends around cyber claims.