Culhane Meadows’ Chicago partner Daniel Struck was recently quoted in an article for Dark Reading which discusses the difficulty of buying cyber insurance and how low-coverage plans could bridge the gap.
Here are a few excerpts from the article:
“Everybody says it, so it must be true” is an example of the bandwagon logical fallacy. In the context of cyber insurance, the argument goes that everyone is a potential victim of an attack, thus everybody must have cyber insurance. In reality, not every organization can afford to buy cyber insurance, and there are organizations that don’t qualify for a policy even if they want one.
Having cyber insurance used to be as simple as purchasing a prepackaged cyber insurance policy, similar to the process of buying a home or car insurance policy. With the explosion of ransomware attacks, the industry has been in disorder as insurance carriers and brokers process claims for damages caused by ransomware. In response to soaring claims, carriers are reducing the amount of coverage offered per policy, charging higher prices for less coverage, imposing much tighter rules on who can qualify for coverage, and cancelling policies for companies that don’t meet the minimum requirements.
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“It’s not a comfortable time to be in business with respect to cyber risks,” says Daniel J. Struck, a partner at the law firm Culhane Meadows PLLC. Characterizing today’s cyber insurance market as being similar to the Wild West, Struck said he would not be surprised to see “relatively low-cost cyber insurance that doesn’t cover much, but at least it provides the certificate for a contractor.” He likens such “skinny” cyber insurance offerings to the low-cost, low-coverage auto insurance policies that allow drivers to meet US state auto insurance mandates.
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One benefit of a basic policy is that it could permit more organizations to obtain affordable coverage, eliminating the possibility of losing insurance and going out of compliance or violating contractual obligations.
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Read the entire article HERE.
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