“’There’s been a hole that’s opening up between cyber and D&O policies, and this will widen the gap and require creative work by brokers to close, (Arturo Perez-Reyes, senior vice president and cyber strategist at San Francisco-based Newfront Insurance) said.”
The causes include the recent SEC cyber regulations, about which we’ve written extensively. The required disclosures, and implicit need for improved cybersecurity, are driving risk for boards, increasing demand for D&O insurance. But D&O insurance may have exclusions for some cyber events, and cyber insurance may exclude D&O claims.
Bottom line: Many public companies will probably need more, and different, insurance. And they better check the fine print to insure they’re covered in disclosures they make, or fail to make, pursuant to the SEC regs. As one industry observer noted, the plaintiffs’ bar is drooling at the litigation to come.