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Details matter when filing cyber business interruption claim


LONDON — Insurance buyers need to be able to clearly demonstrate the effect that a cyber incident has had on their business when making a business interruption claim, experts at a seminar in London Tuesday said.

As well as loss of profit, buyers need to be able to show the effect an interruption has had in terms of losing customers or reputation, experts from London-based law firm DAC Beachcroft L.L.P. and London-based forensic accounting firm RGL L.L.P. told attendees at the Cyber Risk Insurance Non-Physical Business Interruptions Claims seminar.

Buyers also must be able to show that they have taken steps to mitigate losses — and these steps need to be taken very quickly after a cyber breach, they say.

Cyber business interruption claims often differ from property damage business interruption claims in that there is no damage to physical assets, said Chris Wilkes, a partner at DAC Beachcroft in London.

Buyers and insurers of coverage for cyber business interruption also must consider the issue of deductibles and waiting periods, said Kevin Harding, a partner at RGL in London.

While physical business interruption losses may have deductible waiting periods of several days or weeks, cyber attacks may have a much shorter time span of just minutes or hours but can result in claims that are more complex, he said.

In the case of cyber business interruption claims, forensic accountants seek granular information, he said, adding that buyers should ensure they have plentiful documentation to back-up claims.

“It is harder to visualise the impact of a cyber claim” than a property claim, said Mr. Harding.

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