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Jun 17, 2015

Cyber Liability in Insurance

The Internet has had a substantial impact on the way we work, sell, communicate, and share information in the Property & Casualty insurance industry. Not only has the internet brought great benefits to the industry, it has also introduced great risk. As our reliance on the internet grows, so does our vulnerability to cyber-attacks.  

One cannot ignore the recent headlines about security breaches with major retailers and financial institutions. Even more sobering is the thought that for every company like Target or Citigroup that gets hacked, there are dozens of smaller companies that also suffer data breaches. Regardless of the size of an organization, the costs to rectify a data breach are extremely high.  

Traditional insurance products do not address the risks involved with doing business on the internet. To help better manage the risks associated with data breach and reduce the significant costs that can result from them, Cyber Liability Insurance was introduced. And the evolution of Cyber Liability Insurance resulted in changes to the ACORD P&C Standard aimed to standardize the transfer of data for these policies. 

In an effort initiated by Caleen Alexanderson, Chair of the Coverage Implementation Working Group and Data Standards Specialist at Agencyport Software, the ACORD P&C XML standard also evolved to incorporate new cyber policy coverage codes and coverage options, aggregates and messages that contain information unique to Cyber Liability.  

Here’s an overview of the changes:

  • Addition of a Cyber and Privacy Liability line of business code in both AL3 and XML
  • 8 new Cyber messages in XML (Add, Modify, Quote, and FullImageNotify, as request and response messages)
  • A new CyberLineBusiness aggregate in XML
  • 26 new cyber coverage codes (these represent cyber offerings from 18 carriers)
  • 8 new cyber coverage option codes
  • 51 standard cyber policy questions in AL3 and XML  

The new Cyber and Privacy Liability changes will be available with the release of ACORD P&C XML 1.29 scheduled for late June 2015.

ACORD is busy working to keep up with changing technolgy and give its members what it needs. The Specialty Lines Working Group addresses many cyber liability industry concerns.  The first priority of the group will be to identify and further update the P&C Standards with any further Cyber Liability items identified. ACORD is looking for participation in this updated working group. Contact James Bielak at for more information.