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Thursday, 20 August 2020 20:06

Wrongful Use of Data: The Next Cyber Storm Brewing on the Horizon

Written by Bethan Moorcraft, Insurance Business Magazine

Index

Insurance carriers are somewhat tentative about providing coverage for wrongful use or wrongful collection of information because it’s still very much an evolving risk. They don’t have the loss data and they don’t have a good understanding of what the aggregate cost will be, therefore it’s a hard risk to price for.

 

Forecasting such a gray area is “an area of difficulty and uncomfortableness for a lot of carriers,” according to Economidis.

 

“There’s also a bit of a maintenance problem,” he added. “Cyber risks are constantly changing, and the policies need to be constantly updated, which is a lot of work for the insurers. They need to do the maintenance on their policy forms so they’re covering the risks that are important to their policyholders today, but, at the same time, they’re a little uncomfortable because these are new risks so they don’t have a lot of data and they’re not really sure what the ultimate costs are going to be. I think the dynamic between those two things makes this a little challenging for insurers.”

 

We thank Insurance Business Magazine for reprint permission.


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