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The cyber insurance market is exploding. How do we know? Look no further than recent Willis and Lloyd’s reports that show large increases in demand for stand alone policies. But how much will insurance companies pay out in the event of a massive cybersecurity incident?

David Cox, partner with Washington law firm Kilpatrick Townsend & Stockton, points out “insurance companies aren’t in the business of paying claims — they don’t make money if all they do is pay claims. They’ll look with scrutiny as breaches get bigger and hit larger limits. That’s good business sense.”

As Cox points out, specific coverages have yet to be put to the test in a court room and due to the many exclusions,  “volatility in the scope of coverage, the limits offered, and how robust the underwriting is,” the market continues to be of the “buyer beware” variety. American Banker has more on the future of the cyber insurance market.

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