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The debate here is whether it was a covered claim or not. A reasonable person would certainly think that a policy sold as cyber insurance would cover a cyber a
by chiph 8y ago
The debate here is whether it was a covered claim or not.
A reasonable person would certainly think that a policy sold as cyber insurance would cover a cyber attack. And presumably a large multinational like Mondelez would have had the policy reviewed by their legal department before signing and paying the premiums.
So far as regulations - in the US standard types of policies (such as auto, home, etc.) are regulated by the states not the feds. A policy that isn't one of those likely has very few regulations around it. In which case the policy language (aka the contract) governs the relationship.
If Zurich wanted to limit the total damages, they should have put that in the policy. And then resell some of that risk to a reinsuror.
This is going to have to be settled in the courts. But in the meantime, I would be hesitant to purchase any cyber insurance from Zurich (or any other insuror) because of the uncertainty that a claim would be paid that this action introduces.
- mcguire 8y agoI agree with your conclusion, but keep in mind that most policies don't cover things that are actuarially impossible to predict, like acts of war. Both sides of this situation seem to have reasonable cases; the results will depend on the definition of "act of war."
- darkpuma 8y agoIs "Criminal organization decides to create damaging ransomware" really so substantially different from "Criminal organization (known as the Russian Federation) decides to create damaging ransomware" that Zurich actuaries can earnestly predict the likelihood of one but not the other? I assert that the line between cyberwar and cybercrime is very faint.
- thedevil 8y agoRather than separating claims into "covered" and "not covered", I recommend a third bucket "might be covered". I think this goes into that third bucket. Whether or not this particular claim should be paid doesn't mean it's not in the third bucket. When buying insurance, you shouldn't rely on payments for claims in the third bucket, especially not without a legal fight. Many consumers don't understand any of this. But I expect (hope) that most large businesses are sophisticated enough to understand this. I don't think this will hurt Zurich's business, because most of their customers probably understand this.