Over the past decade, global cybercrimes have skyrocketed, fueled by the increased use of computer-based technology. There is little dispute that the techniques and technology employed by bad actors are ever-evolving, with estimates that by 2025 cybercrime will cost the world $10.5 trillion annually. Very recently, the United States and other governmental authorities have warned of an increased likelihood of cyberattacks in light of recent Russian militarism in Ukraine. See James Doubek, The U.S. warns companies to stay on guard for possible Russian cyberattacks, NPR (March 21, 2022); Joe Tidy, The three Russian cyber-attacks the West most fears, BBC (March 22, 2022).
In response to these increased cyber threats, governments, businesses, and consumers alike are ramping up their cyber security measures. Many prudent businesses are also revisiting their insurance portfolio, seeking confirmation that their coverage will adequately protect them if they are victimized by increasingly sophisticated cyberattacks, including those connected to the acute conflict in Ukraine.
This exercise has put an oft-overlooked exclusion found in many types of insurance policies—the War Exclusion—directly in the spotlight. And while there have been various calls to action to address outdated War Exclusions in the last few years, to which the market has begun to respond, the results do not go far enough in modernizing the War Exclusion for our increasingly digital age or to provide the certainty policyholders’ premiums should guarantee in light of the present Russia-Ukraine war.
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