Terminology confusion ‘stifling cyber insurance’
Written by Peter Walker
The lack of standard terminology in cyber insurance policies causes confusion for brokers and customers, and is ultimately stifling market growth, according to cyber insurance comparison engine Cyber|Decider.
While demand for cyber insurance is growing, there is much confusion about the policies available and the terms of cover because insurers fail to use standard wordings. For instance, what one firm calls ‘network expenditure’, another terms ‘data restoration costs’, while in some policies the definition of 'computer' also includes ‘industrial control systems’ and in others it does not.
Across all other insurance lines, whether commercial or personal, underwriters use standard terms to be clear and concise about the terms of cover available. But insurers offering cyber cover have so far been reluctant to use standard wordings because of concerns that sharing an agreed standard policy is anti-competitive and illegal.
Cyber|Decider chief executive Neil Hare-Brown said that companies are not getting the right cover because cyber insurance is an area that causes brokers confusion and insurers have done little to rectify that.
“Lawyers have scared insurers into believing that it is anti-competitive for them to discuss creating standard terminology for cyber insurance, although it is the norm for all other policy areas,” he stated.
“The off-putting and confusing language used in such policies is a barrier for both brokers and clients, and it is essential that underwriters are aware of the extent to which the current complicated and often contradictory wordings are stifling market growth.”
Hare-Brown explained that this means many brokers will only offer customers a blanket policy, whether that is right or wrong for the customer’s specific needs.