Study: How Much Does Cyber Cover?

A study commissioned by FM Global.
August 7, 2019

A study commissioned by FM Global reveals that 70 percent of senior financial executives at the world’s largest companies believe their insurer would cover most or all of the losses their company would incur in a cyberattack. However, degradation of the company’s brand/reputation, increased scrutiny from the investment community, decline in revenue/earnings, introduction of regulatory compliance problems, decline in market share, and decline in share price are among the losses executives think will be covered by insurance but are not.

FM Global says insurance would be expected to cover lost revenue during the span of a disruption, but lost revenue related to lost growth, market share, and brand equity after resumption of operations would not normally be covered. FM Global asserts that “new costs to mitigate the loss,” such as expenses related to restoring data or equipment, would be covered by first-party cyber insurance or property insurance. The firm maintains that litigation and customer notification costs would be covered by third-party insurance. Meanwhile, more than half of executives agree that financial recovery from a substantial cyber security event would take months to years.


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