ADJUSTERSINTERNATIONAL.COM • (800) 382-2468 • INFO@ADJUSTERSINTERNATIONAL.COM 5 stand-alone, cyber-only policies grew to account for more than two-thirds of the US domestic cyber insurance market from 2022. That trend reversed slightly in 2023, when premiums for stand-alone cyber policies decreased by about three percent. Meanwhile, premiums actually rose by slightly more than five percent for packaged cyber. It remains to be seen whether the shift to packaged cyber coverage in 2023 was a blip or a sign of something more permanent. There’s little doubt, however, that insureds will seek coverage for a claim wherever they think they can find it. The unique nature of cyber risk is reflected in the unique structure of cyber policies. Most property and liability policies consist of one to three major insuring agreements, subject to per loss and aggregate limits, with some additional or supplemental coverages with sub-limits provided within or in addition to the basic policy limits. Cyber policies commonly have multiple insuring agreements (the ISO model has six) addressing first-party losses, third-party liability, and additional costs arising from a cyber event. In most cases, loss settlement is based on an ascending scale of limits: • A sublimit for each insuring agreement, which is subject to— • A per-loss limit for a cyber event (typically defined to include a related series of incidents); which in turn is subject to— • An aggregate policy limit. There may also be additional sub-limits under each insuring agreement for different types of attacks, failures, or costs associated with an insuring agreement. Cyber claims specialists must apportion claim costs among various insuring agreements to achieve the maximum possible recovery. This may require forgoing a claim under one insuring agreement in order to claim the maximum available under another while staying within the per-loss and aggregate limits. Covered or excluded? GBA Insurance, a brokerage based in Scarsdale, NY, identifies seven types of cyber-related exposures for which insureds will want to know where to look for coverage3 (see chart on page 7). Overlap Examples Consider an account that has a cyber policy with media liability coverage that extends to advertising injury and a commercial general liability (CGL) policy with coverage for personal and advertising injury. Presume also that the CGL limit for the personal/advertising injury is more than the amount provided under the cyber media liability coverage. Other considerations aside, if the CGL policy has no cyber exclusion, the insured would seek coverage for a cyber-related advertising injury claim under it. CGL policies provide more coverage and typically pay defense costs outside policy limits. Also, filing the claim under the CGL policy reserves coverage under a cyber policy’s per loss and aggregate limits for claims under other
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