While market offerings in the cyber insurance space have improved in recent years, the industry still has room for improvement.
Daniel Holden, risk and insurance manager with Daimler Trucks in Portland, Oregon, says he feels insurance carriers are earning a “B-” grade in terms of responding to changing risk with appropriate products.
“I think there’s a lot of catching up to do. The industry is doing better, but often when underwriters don’t understand something, they just set low limits and throw a big-dollar premium at it,” Holden told Insurance Business America
. “I think right now we’re seeing high premiums with not a lot of coverage. The onus is still really on the employer to make sure they have their house in order and then consider if you want cyber insurance as a backup.”
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As risk and insurance manager with the trucking manufacturer, Holden hopes the market will evolve to offer products that address more nuanced cyber-related risks. A combination cyber/crime policy is at the top of his wish list, he says.
“If a rogue employee goes online and steals money from you, that falls under crime, but if it was done through hacking, wouldn’t that also be a cyber peril?” he said. “There is a blurred line between the two, and there’s yet to be a product that covers both cyber and crime that occurs via hacking.”
Holden noted that some carriers offer endorsements for expanded coverage, and believes underwriters will “sort out any problems” before clients feel compelled to file lawsuits and courts get involved.
“The demand will be there, and underwriters will take that as an onus to create the product,” he said. “Maybe we’re still 10 years away from that – it depends on where cyber risk and hacktivism moves.”
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