With cyber risk becoming a pervasive threat to all operating entities, it now impacts practically every line of commercial insurance. However, it remains unaddressed in many lines of insurance, according to risk management association Airmic.

“The lack of clarity in some standard property and casualty policies can lead to confusion or misunderstanding about coverage for cyber risks,” Airmic said.

Meanwhile, an insurer covering a loss it had not contemplated can jeopardize its credit rating or financial solvency, the organization said. Airmic referred to these potential cyber exposures as “silent” cyber or “non-affirmative” cyber.

A new whitepaper, available in full on Airmic’s website, provides an overview of silent cyber and the responses insureds should make to it, including policy options for buyers and potential arguments for insurers denying cover. The paper also describes the market response to silent cyber, including exclusions on directors’ and officers’ liability and crime insurance products, property and marine affirmative covers, standalone cyber policies, and providing options for insurance buyers.

“Insurers and regulators are taking action to address the risk of silent cyber,” said Lyndsey Bauer, partner at specialist insurance broker Paragon and author of the white paper. “Policy language is evolving and that is impacting coverage. Besides being untested, the drafted language could also be overreach.”

Bauer said that policyholders faced the challenges of getting inconsistent responses from their insurers, inadvertent loss of intended coverage, and program gaps.

“Finally, insureds should prepare for renewal – they should develop a strategy, identify renewal priorities, approach the market with C-suite support and always review feedback,” Bauer said.