8 ADJUSTINGTODAY.COM obtaining comprehensive cyber-insurance policies. As cyber-incidents have now surpassed traditional risks like business interruption and natural catastrophes, insurance coverage needs to evolve accordingly. Silent cyber exclusions, while intended to delineate traditional and cyber risks, create significant coverage gaps. Businesses must seek out cyber policies that address a wide range of exposures, from financial crime and data breaches to property damage and reputational harm. Organizations should also ensure their cyber policies are tailored to their specific risk profile. Coverage gaps must be addressed by developing policies that include affirmative coverage for all cyberrelated risks, such as third-party bodily injury and property damage. Doing so will mitigate the risk of catastrophic losses, which could otherwise fall outside the scope of traditional property and liability policies. • Engage a Professional Team to Navigate Cyber Claims: The complexities of cyberinsurance make it crucial for businesses to involve trusted professionals when filing cyber-related claims. The importance of assembling a team that includes a broker, attorney, risk manager, and public adjuster to For example, one would not expect a cyber policy to cover a professional liability claim simply because faulty guidance was communicated by email. But what if a professional service uses a client’s electronic network to gather information and communicate with the client? What if a loss results from a miscalculation or miscommunication due to a cyber peril? Such cases are growing rapidly. Where does one draw the line between the cyber exposure and, in these cases, a professional liability exposure? Even if it can be demonstrated that a computer system malfunctioned to produce the loss, there still be potential liability for a professional’s selection and implementation of the system. Let’s turn this on its head and presume that a management or professional liability policy is written with an exclusion of coverage for any loss caused by or arising from a cyber-attack, data breach, or another of the common “cyber perils.” The law will still find liability if claimants can prove negligence or a wrongful act. The only question will be what, if any, coverage is triggered by the claim. As cyber-insurance evolves, cyber adjusters — and property and liability adjusters — will have to become “jacks of all trades,” as the CLM suggested back in 2016. Their work will become more complicated as carriers seek to enforce a separation between cyber and non-cyber risks that may not be possible or practical. The growing prevalence of cyber threats underscores the urgent need for businesses to take proactive steps in safeguarding their operations. The devastating impacts of cyber-attacks, like those involving CDK Global and CrowdStrike, serve as cautionary tales for all organizations that rely on technology. As these incidents illustrate, no business — large or small —is immune to the paralyzing effects of cyber perils. Therefore, it is imperative for organizations to adopt a multi-faceted approach to managing cyber risks, combining robust insurance coverage with a deep understanding of how to navigate the complex landscape of cyber policies: • Invest in Comprehensive Cyber-Insurance Policies: Given the rapid evolution of cyberattacks and their devastating financial consequences, businesses must prioritize Some companies still operate under an assumption that coverage [for cyber events] will be afforded under the professional liability or directors & officers insurance policies.
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