Robert F. Kennedy’s Day of Affirmation address at the University of Cape Town, South Africa, on June 6, 1966, included this memorable passage:
“[Comfort] is not the road history has marked out for us. There is a Chinese curse which says: “May he live in interesting times.” Like it or not, we live in interesting times. They are times of danger and uncertainty; but they are also the most creative of any time in the history of mankind.”
We are certainly living in interesting times.
Technological innovation is making leaps and bounds worldwide, and the creativity rippling through the business world is monumental. Of course, these are also times of danger, as new technologies and widespread interconnectivity are rapidly spawning new risks –
cyber exposure being a notable adversary.
“I’ve heard insurance company executives say one of the challenges about writing cyber coverage is [how new it is],” said Michael O’Brien,
partner, Wilson Elser. “The insurance industry is very good at looking backwards at things and using what happened in the past to measure risk into the future and get the right premium for that risk.
“But now we’re talking about a [time when] technology’s growing so fast and becoming pervasive in so many different areas – and we don’t have hindsight [into the risks] yet. The insurance industry might be covering losses five years from now that no-one ever anticipated.”
Cyber exposures can manifest themselves in a number of ways, especially in the growing realm of interdependent technologies
and Internet of Things (IoT) connected devices. Companies in the booming IoT product market are having to weigh up whether their commercial general liability and product liability policies are solid when thrust up against a potentially intangible cyber threat. Lots of policies contain cyber exclusions, leaving many companies underinsured against the risk.
On the flip side, some insurers underappreciate that they may actually be covering cyber risks that manifest themselves in bodily injury and property damage under more traditional policies like commercial general liability and product liability policies, according to O’Brien.
“They’re unaware of the risk and they’re not getting commensurate insurance premium back because they don’t fully understand the [exposure],” he added.
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