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Variety of insurance coverages could respond to vehicle hacks

Posted On: Apr. 3, 2023 12:00 AM CST

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Insurance coverage for vehicles’ cybersecurity risks may be found in policies including cyber, tech errors and omissions, property, general liability, products liability and, of course, auto, while there is a movement toward hybrid policies, experts say.

Policyholders with potential exposures include manufacturers, trucking companies and associated vendors, among others.

Those seeking cyber coverage should proceed cautiously, said John Farley, New York-based managing director of Arthur J. Gallagher & Co.’s cyber liability practice.

Many cyber policies exclude third-party property damage and bodily injury, while regulatory risk is covered comprehensively in certain cyber policies but not others, he said.

Insurance buyers must also be “very cognizant” as to whether there is coverage for wrongful data collection, Mr. Farley said. 

Each policy is different and subject to manuscript forms, so insurance buyers must be aware of sublimits, exclusionary language or required triggers to obtain coverage for wrongful collection claims, he said.

“The market is very dynamic,” and “coverage can change from day to day,” Mr. Farley warned.

Laura Burke, New York-based senior vice president of Canopius Group Ltd., which offers cyber and tech errors and omissions coverages for trucking companies and vendors that provide logistics services for the trucking industry, said that most “off-the-shelf, traditional cyber policies likely cover the majority” of issues. 

Michael Stankard, Detroit-based managing director, industrial & materials & automotive practice, at Aon PLC, said auto manufacturers have product liability coverage that covers the entire vehicle for bodily injury and property damage claims, which “is the case today even for claims that originated from a cyber hack” that result in these losses.

Elisabeth Case, Chicago-based managing director in Marsh LLC’s U.S. and Canada cyber practice, said auto insurance is the “first stop.” 

A vehicle’s insurers would be the first responders to a claim, and then if there is a common pattern to losses, a number of similar cases or dollar amounts that are exceedingly high, auto insurers may subrogate against the automobile’s original equipment manufacturer, she said.

D.J. Ruhlman, New York-based vice president of RT ProExec, a division of R-T Specialty LLC, said the market is moving toward hybrid policies, with teams from different disciplines collaborating in the underwriting and addressing overlapping cyber/tech errors and omissions, property damage and product liability exposures. 

Bringing them together in one program can help provide clarity when a loss occurs, he said.