As more and more companies enter the burgeoning cyberinsurance marketplace, they often ask policyholder counsel like me how they can choose the best cyberpolicy when confronted with so many choices. When the marketplace was still in its infancy just a few years ago, this was a considerably harder question because the policy forms, including the scope of first party and liability coverages being offered by different insurers, varied so drastically. But as the cyberinsurance marketplace enters its adolescent stages, there is beginning to be more standardization in available coverages and exclusions, at least at a high level. But what has not changed is that many key terms of these policies remain negotiable (considerably more so than for other types of insurance policies), and the courts have been presented with few opportunities to provide guidance on how key provisions in these policies are likely to be interpreted.
The net result is that prospective policyholders can and should continue to negotiate aggressively in the underwriting process, especially when purchasing cybercoverage for the first time. But what provisions should a prospective policyholder be most concerned about? The answer depends largely on the most prevalent risks faced by individual companies, which are unique to them. However, there are some provisions common to many cyber policies that, in my view, present risk to all policyholders due to imprecise or inappropriately restrictive coverage language. Because these provisions are almost certain to be the basis of numerous denials of coverage, they are likely to be tested in litigation in the next few years and deserve particular focus by prospective policyholders. Some of these looming battleground provisions include:
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.
For questions call 1-877-256-2472 or contact us at [email protected]
