Inconsistent Cyber Insurance Clauses Create Uncertainty in Coverage

Lockton Re's report reveals significant inconsistencies in critical infrastructure clauses within cyber insurance policies, leading to uncertainty for insurers, reinsurers, brokers, and policyholders. The report models potential outcomes, indicating a 20% relative decrease in industry loss ratios at the 1-in-50 return period due to varying clause interpretations. The analysis highlights the neglect of these clauses amidst discussions on cyber war clauses, emphasizing the need for clarity in policy language. As definitions of critical infrastructure expand, particularly with data centers, the report calls for a review of existing clauses to ensure consistency and relevance. The findings suggest that the current language fails to keep pace with technological advancements, creating challenges for coverage clarity.

Key Points: • Lockton Re identifies inconsistencies in cyber insurance clauses affecting critical infrastructure. • The report models a potential 20% decrease in industry loss ratios due to clause variations. • Urgent action is needed to align insurance language with evolving technology and infrastructure definitions.