3 minutes read

Coverage Overlaps With Cyber Policies

Better underwriter training, smarter exclusions and tighter endorsements can help to address this growing issue.

This article summarizes a recorded interview held with insurance expert Kelly Geary, exploring the rising challenges of “coverage overlaps” with cyber insurance policies. As technology blurs the lines between traditional insurance products and cyber policies, insurers face the need to assess and streamline their offerings to ensure comprehensive protection for businesses in an increasingly technology-driven world. Watch the full interview on YouTube.

Silent Cyber and Coverage Overlaps

When it comes to cyber insurance, “coverage overlap” highlights a critical challenge faced by traditional policies originally designed for property, employment, and professional liability risks. Historically, insurers evaluated and handled claims based on actuarial data. However, the rise of technology has blurred the lines between traditional insurance products and cyber insurance policies.

While silent cyber initially drew attention to the industry’s unpreparedness for emerging cyber risks, the current focus has shifted to tackling coverage overlap. This challenge necessitates careful assessment and streamlining of insurance offerings, ensuring that various policies align in their coverage for cyber or technology-related risks to enhance  protection for businesses and streamlined claims handling for cyber-related exposures.

Coverage Overlaps Training

It is becoming increasingly difficult for many underwriters to handle policies when they have to deal with a combination of cyber and property risks due to the traditional approach of specializing in one area of risk. A generational gap between an aging insurance workforce that is less tech-savvy and modern technological advancements further exacerbates this disconnect. It is therefore essential to have comprehensive training on cyber risks in order to effectively resolve coverage overlap issues.

It is therefore essential to have regular, comprehensive training on cyber risks to effectively resolve coverage overlap issues – without it, the potential for coverage gaps and miscommunication between carriers and insureds will remain an ongoing issue. For example, underwriters can be trained on coverage overlaps by comparing and contrasting their policies with their competitors. 

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Exclusions and Endorsements for Coverage Overlaps

Insurers have introduced several exclusions to clarify coverage boundaries. However, Kelly pointed out that these may impact core coverage within traditional policies, leaving businesses vulnerable without dedicated cyber insurance. Brokers must carefully consider these exclusions on a client-by-client basis to ensure comprehensive protection. Additionally, policy endorsement definitions play a crucial role in coverage scope, emphasizing the need for tailored solutions to address coverage overlap effectively. Collaborative efforts among insurers, brokers, and clients are essential to navigate the complexities of coverage overlap, exclusions, and endorsements.

Watch Kelly comment on real-life policies to put this theory into practice.

The Impact of Merck 

In 2017, Merck suffered a significant business interruption loss due to the NotPetya cyberattack, leading to a claim under its property policy. However, the claim was denied based on the war exclusion clause, which the court later ruled did not encompass cyber warfare. This landmark decision prompted the insurance industry to reevaluate the war exclusion and led to more specific policy language and exceptions in both cyber and traditional insurance products. The case serves as a critical lesson for the importance of staying updated on emerging cyber risks and tailoring policies to address coverage overlap effectively. 


Addressing coverage overlap in cyber insurance requires proactive measures and collaborative efforts among insurers, brokers, and clients. By carefully considering exclusions and policy endorsement definitions, insurance professionals can craft tailored solutions that strike a balance between protecting businesses from cyber risks and preserving essential coverage within traditional policies.  

Find out how our CCIS training tackles coverages overlap and other pressing cyber insurance topics.

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