New Cyber Option for BOP Writers - ISO Has Endorsements
Insurers that focus on the SME segment - small to medium enterprises - are finding more options for delivering data breach solutions to their customers. ISO just joined the ranks with its filing of Cyber Insurance Endorsements for BOP carriers.
The new ISO offering has many similarities to the products already available in the proprietary marketplace, including ours. The Information Security Protection Endorsement, BP 15 07 03 15, has three building blocks, with breach response protection as the base and required coverage part. If you have worked with the ISO E-Commerce program, the content and approach will be familiar.
The three tiers of Cyber coverage address:
- First Party Expense Coverages - Security Breach Expense, Public Relations Expense, and Replacement or Restoration of Electronic Data.
- Liability Coverage - Security Breach Liability.
- First Party Expense Coverages for Extortion Threats and Business Income and Extra Expense; also Web Site Publishing Liability.
The offering comes at a good time. ISO recently introduced endorsements excluding data breach coverage from its commercial programs. The GL and CU exclusions have been approved in all states, and the BOP and Farmowners are not far behind. The new Information Security Protection Endorsement provides protection that cannot be found in these core insurance products. ISO members can find the filing in LI-BP-2014-93. It includes additional endorsements related to payment card industry fines and penalties, and dishonest acts by employee.
Will insurers adopt the new ISO Cyber product for their BOP customers? Insurers will want to examine the coverage and rates before making that decision. As a reinsurer, we have many conversations with insurers on the Cyber topic, and ISO approaches are usually discussed alongside proprietary options.
The Cyber market is evolving quickly. Our own Cyber product has evolved as exposures and customer needs change, and we expect the ISO product will morph over time, too. It is all part of refining new products in a changing environment.