Specialty Insurance Blog

Insurance Agent Liability to Third Parties

Insurance agents and brokers may have liability to third parties, not just their clients, in certain situations and states, and this may increase losses under Insurance Agents/Brokers E&O (Errors & Omissions or Professional Liability) policies. How can third party liability arise? A simple example would be the following: an agency fails to place an auto policy, and the owner of the vehicle injures a third party. The insurance is not in place and the owner does not have financial resources to compensate the victim. The victim sues the insurance agency claiming negligence. The legal question is whether the agency owes the victim a duty, in this case to place the insurance for the owner. Some states allow a third party... Read more →

Cyber Risk Insurance – Left of Boom

We have read numerous warnings of cyber risk along with the need for protections and Cyber Isurance. The Dogs of Cyberwar, an excellent article in Leaders Edge, discusses the most sophisticated cyber attacks and pre-loss risk mitigation efforts – called Left of Boom. These sophisticated attacks, called Advanced Persistent Threats (APTs), are designed to extract valuable information from a company’s network over a period of time. With a simple example, the article points out the difficulty of preventing even diligent employees from making a wrong click and triggering a major cyber event. Therefore, organizations need to be proactive – left of boom. The phrase is derived from the work performed in the Department of Defense where “boom” is a bad... Read more →

Lloyds Top Risks of 2013 – Cyber Risk

As noted in our prior post (see here), a survey conducted by insurance market Lloyds of London, called the 2013 Lloyd’s Risk Index, identified cyber risk as one of the top risks of 2013. Cyber risk was the third highest risk, following high taxation and loss of customers/cancelled orders, and the highest risk in the political, crime and security risk category. This was a significant move up the list from the last time the report was completed, in 2011. It appears that businesses across the world have encountered a partial reality check about the degree of cyber risk. Their sense of preparedness to deal with the level of risk, however, still appears remarkably complacent. Against all the evidence of the... Read more →