Insights

Securing executive liability or cyber insurance may seem like a straight forward process, however the emergence of online service shopping has created considerable confusion and actually become a risk to executives seeking coverage. As organizations delegate insurance inquiries to management and more insurance companies aim for the “quick quote” model, it’s becoming increasingly common for organizations to pursue their coverage needs by saturating the most convenient platforms such as direct quote platforms, online brokerages and insure-tech portals.

This is the part one of our four part Ransomware Guide. Parts 2-4 can be located below.

Part 2: The Most Effective Ransomware Protection According To The Experts

Part 3: Ransomware Insurance: What to Look For

Given the recent surge of ransomware attacks and escalating conflict with Russia, assessing a cyber insurance policy’s war/terrorism exclusion has never been more important. The cyber war exclusion, used by insurers to insulate against catastrophic risk, has been a considerable topic of discussion due to its overly broad language and potential for mis-application. Nearly all cyber attacks are in essence, invasions, involving foreign enemies, many of which do inflict terror – this highlights the obvious issue at hand.

Cyber extortion has quickly become the preferred cyber-crime for malicious actors. Attacks have grown exponentially and it is largely expected that the trajectory will only continue. In response to these attacks, organizations really need to be making careful assessments of their current cyber hygiene and strengthening their security measures. Below we have compiled some of the most effective cyber/ransomware security controls according to the experts and insurance companies.

Despite common misconception, the insurance market for Fintech companies is relatively small. Given the limited carriers providing terms and the difficulty some companies can encounter when going to market, there are some steps executives can take in order to ease the process, maximize terms and reduce pricing.

SPACs have had an eventful and tumultuous year. The undeniable momentum that has recently quelled  will likely stabilize with time but the SPAC roller coaster has definitely entered its next apex with the obsession seemingly shifting from investors to regulators, plaintiff firms, and short sellers. As the overwhelming majority of SPACs appear to be underperforming, trading below their IPO price of $10, there has been considerable speculation over an impending wave of shareholder litigation.

Companies operating in the Fintech space are exposed to a wide range of risk and litigation. The mix of professional/financial services, tech platforms, proprietary software & algorithms, considerable capital required to fund operations, and cyber security challenges create a complex risk environment, requiring a carefully structured insurance program. For Fintech companies currently seeking proposals, we have a helpful guide here, that discusses tips and considerations when going to market.

While special purpose acquisition companies and more traditional IPOs may share some similarities, they are considerably different, both in their approach, statements and disclosures, and when it comes to structuring D&O coverage. While a newly public company often only has to worry about a single entity/transaction, SPACs are a series of transactions each requiring careful coverage coordination among 3 separate entities for all intents and purposes. When structuring a D&O insurance program, there are 3 distinct stages:

Directors and officers insurance is one of the most misunderstood insurance products. These policies are complex, can be written and structured a number of different ways, and contain policy language that varies greatly from insurer to insurer, so it's no wonder that even sophisticated executives are often confused by their terms. It’s also an insurance product that many organizations cannot afford to be without. Below we address some of the more basic misunderstandings policyholders often have when it comes to D&O insurance.

As Covid-19 and the faltering economy continue to create financial stress on companies across a myriad of sectors, bankruptcies are expected to rise sharply. Executive liability insurers are responding by underwriting cautiously and more aggressively. As a result, the c-suite is likely to encounter rising premiums and more restrictive terms. One such example…the application of an insolvency and/or creditor exclusion.