Perhaps because I have been around so long, I am privy to information that is shared behind the scenes with “high net worth” insurance company executives. It has been interesting watching what they anticipate will impact the insurance industry. For two years, the concern was whether or not those with a particular endorsement in their policies would be able to collect on Contingent Business Interruption Claims caused by “Acts of Governmental Authorities” in shutting down service businesses due to the pandemic. More recently, however, information sharing and concerns have been revolving around the Russian/Ukraine Ware.
What is the big concern now? Cyber-attacks. Generally, war-related losses are excluded from payment by insurance policies. After 9/11 and the question, “will the war exclusion be applied here?” it was determined that the world needed terrorism insurance. However, there is a question now as to whether or not terrorism insurance cover cyberattacks. Just like in everything else, “The large print giveth and the small print taketh away”. The interpretation of clauses in policies as determined by courts, if necessary, will prevail.
Much of the commentary on this topic suggests that clauses had been interpreted as a legalistic trick for insurers to avoid paying claims. However, these clauses in the policies represent an important development that should remove one of the major impediments to the growth of cyber insurance. They provide insights into the balance of responsibility between the public and private sectors in generating resilience and norms of state conduct. Existing exclusions for war are inadequate to capture nation-state activity in cyberspace, coupled with potential litigation over insurance claims which might be made under property insurance policies that might be ambiguous on this topic.
As a former Navy Intelligence Officer, I cannot see Putin losing. So, what can be done? Lao Tzu, writing in The Art of War, says that a golden bridge to escape should be provided for your retreating opponent.
Until such a thing can be made to happen, one thing that Putin can do to bring us to our knees is unleashed terror attacks. Will the damage from such attacks be covered? To answer this question in my favor, I just yesterday purchased cyberattack insurance. I added it as an endorsement to my homeowner’s insurance policy. It was only $ 200.00, and I would recommend this purchase to anyone with a computer.