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General liability cyber coverage shifts as “silent cyber” is removed

Insurers have adopted ISO-style “Cyber Incident” exclusions that can bar not only data-breach costs, but also bodily injury and property damage tied to cyber attacks.

Reported · Written up by our desk · Liability Insurance

Insurance Journal reports that many businesses previously assumed their general liability (GL) policies could act as a limited safety net for physical consequences stemming from a cyber event.

The outlet says the market has been moving since 2014 away from “silent cyber” coverage, including a shift from earlier approaches that sometimes carved back protection for bodily injury to a more complete removal. It notes that the majority of carriers have adopted Insurance Services Office, or similar, exclusionary Cyber Incident wording (CG 40 35 12 23).

Under the newer endorsement, the focus shifts to the cause of loss, not the type of information compromised, using a broad definition of a “Cyber Incident” that can include unauthorized access, viruses, or denial-of-service attacks.

Insurance Journal adds that the underwriting intent is to exclude resulting bodily injury, property damage, and personal and advertising injury from the GL policy, which could leave some companies facing coverage gaps and prompting reviews of GL, property, and cyber coverage, especially for contingent physical damage scenarios.

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