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The availability of cyber insurance coverage is certainly evolving as cyberattacks and data breaches become what seem like the norm. Moreover, the cyber insurance market is expected to grow to $5 billion by 2018 and will most likely begin to offer a wider variety of policies to an increasing number of industries. Mark Smith, broker and leader of Swett & Crawford’s Cyber Liability Practice, provides us with several instances of how and why the cyber insurance industry is changing and how carriers are differentiating their products:

  • What happens after the breach becomes important: Carriers providing comprehensive post breach response services differentiate themselves from their competitors who leave the response up to the insured, as many clients are looking for a carrier to handle their breach response on their behalf with leading industry experts.
  • No more one policy fits all industries approach:The cyber risks for companies in different industries are not the same. The exposures for healthcare companies differ from educational institutions and from retail. Tailoring the coverage to fit the liabilities specific to the customer’s industry provides better coverage and demonstrates knowledge of their specific needs.
  • The disappearing exclusions:Early entrants into the cyber market approached cyber exposures very carefully which was reflected in the many exclusions in their policies. As the market has matured, some exclusions such as “failure to upgrade security” and an “insured’s security failing to match that disclosed on the application” have been discontinued; however, some, like an unencrypted device exclusion remain common place.

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