January 27, 2016 by Canadian Underwriter
Global insurance broking and risk management company Marsh LLC announced on Wednesday the launch of Cyber ECHO, a new global excess cyber risk facility that provides “more reliable insurance coverage” for organizations around the world, including in Canada.
Following a series of high-profile cyber losses, underwriters have become more selective and in some cases are reducing the amount of capital they are willing to deploy on certain risks – especially those involving healthcare and payment card data, Marsh said in a press release. “This is particularly acute in the excess cyber market, where rates have more than doubled in the [United States] over the last 12 months,” Marsh said.
Cyber ECHO brings “greater stability” to the excess market with up to US$50 million in “follow form” coverage for clients of “any industry sector and risk profile around the world,” Marsh reported. A Marsh spokesperson told Canadian Underwriter that Cyber ECHO will be available in Canada and headquartered in London, United Kingdom.
Underwritten by Lloyd’s of London syndicates, the facility is designed to respond consistently to the terms and conditions outlined in the primary cyber policy. Such follow form language helps to mitigate coverage ambiguities that can sometimes lead to costly disputes and/or delays in claims payments, the release added.
Cyber ECHO also includes a pre-priced option that allows insureds to reinstate policy limits, should they experience a cyber event during the policy period that has the potential to exhaust their policy limits.
“While overall capacity in the cyber market remains abundant, the excess market is highly volatile,” said Bob Parisi, Marsh’s U.S. cyber product leader, in the release. “With Cyber ECHO, we are providing clients of all industry sectors with an efficient and more predictable excess coverage solution.”
Leslie Kurshan, head of product development for the Financial and Professional Practice at Marsh UK, added that “inconsistent wordings and varying terms and conditions between primary and excess insurance policies can contribute to significant delays in claims being paid and may even result in the failure to recover costs from insurers. Cyber ECHO helps to mitigate these issues, and is designed to aid in swift recovery from a loss.”