Last week,
While this significant settlement puts an end to the six-year battle for coverage for the pharmaceutical company, there are several key takeaways regarding coverage for cyberattacks that in-house counsel and risk managers should consider in 2024:
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Although the details of the
- Cyber incidents are sometimes perpetrated by foreign governments or quasi-state actors that may be engaged in armed conflict halfway around the globe. Policyholders should not assume that traditional "war" exclusions drafted during the Cold War necessarily bar coverage for twenty-first century attacks in cyberspace. In light of the
New Jersey trial court and intermediate appellate court ruling, policyholders should work with coverage counsel to evaluate and respond to insurer arguments that war or state actor exclusions apply to cyber incidents. - In response to the
Merck litigation and other NotPetya related coverage disputes, the insurance industry continues to add new exclusions to limit their exposure to cyberattacks perpetrated by state actors or in connection with warlike conduct. As we discussed in https://www.propolicyholder.com/2023/02/new-exclusions-limit-insurance-coverage-cyber-attacks/, as ofMarch 2023 , Lloyds of London insurers mandated several new exclusions designed to cover cyberattacks, andU.S. -based insurers are increasingly following suit, either through new war or state-actor exclusions specifically addressing cyber exposures, or other language aimed at ringfencing exposure for widespread cyber events. This language is often negotiable. - Although the terms and conditions of cyber policies vary widely, the threat landscape continues to evolve. Policyholders should carefully review their coverages every year with their brokers and coverage counsel to obtain the broadest coverage possible to mitigate against the risk of catastrophic cyber-attacks.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
NY 10105-0106
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