Skip to main content
Survey Report

Construction Marketplace Realities 2019 – Cyber Liability

Cyber Risk Management|Insurance Consulting and Technology
N/A

March 29, 2019

Pricing in the cyber marketplace is expected to remain stable in 2019, with gross written premiums continuing to rise.

Rate predictions

  Trend Range
Cyber Liability Rate Forecast: Increase +3 to +5%

Key takeaway

Pricing in the cyber marketplace is expected to remain stable in 2019, with gross written premiums continuing to rise.

The cyber insurance market remains competitive with over 100 markets offering some form of coverage, and more than $600M of capacity available in the marketplace. Many carriers have released revisions and/or updates to their existing primary forms, in an effort to maintain a competitive advantage in the marketplace. While the cyber market remains competitive, carriers are beginning to push back on price decreases and some expanded terms, in particular relative to business interruption coverages.

Expanded coverage, such as voluntary shutdown of a computer system, reputational damage and coverage for forensic accountants in the event of a business interruption event, remain available in the marketplace, as well as coverage for construction and engineering risks that include privacy claims due to drone usage, contingent bodily injury and property damage due to a cyber event, downstream contractual penalties, and missed bid/RFP coverage. As construction and engineering firms incorporate technology into projects, such as building information modeling (BIM), project management and design software, the exposure to cyber risk increases.

According to the 2018 Cyber Risk Outlook, cyber risk is becoming increasingly international, with cyber losses being reported in almost every country. The human element continues to be the leading cause of cyber risk, representing 61% of the claims included in Willis Towers Watson 2017-2018 Reported Claims Index. Insurers are observing two to three business interruption claims a year, with losses exceeding the waiting period.

Pricing in the cyber marketplace is expected to remain stable in 2019, with gross written premiums continuing to rise. A key question has been whether cyber should be a stand-alone product or included in other coverages such as property or general liability. While the issue has yet to be resolved, some carriers are taking a clear position regarding physical loss and how a cyber event could affect an insured’s other policies, including property and general liability.

Contact Us