Cyber business interruption demands equal attention as other cyber risks: IUA

Cyber business interruption (BI) risks should be given the same priority as information technology (IT) security controls and ransomware threats, according to a new report released by the International Underwriting Association (IUA).

The report, produced in partnership with Baker Tilly, examines claims data from recent years and finds that while understanding of cyber BI has progressed, further improvements are needed to improve the claims process for both insurers and policyholders.

Helen Dalziel, Director of Public Policy at the IUA, said: “The cyber insurance market has handled a significant increase in business interruption claims in recent years, both in terms of volume and value.

“In 2024 alone we have seen the Change Healthcare, CDK and CrowdStrike events, highlighting the importance of cover for such risks and the threat of systemic risks. Our new report seeks to identify the challenges that arise when calculating cyber business interruption losses and how they can be addressed in future.”

The report highlights the increasing significance of cyber BI coverage within insurance policies, noting its potential to represent a substantial portion of claim settlements.

Ben Hobby, Principal at Baker Tilly, commented: “We are delighted to again collaborate with the IUA in helping to share some of the experiences and knowledge we have learned from the cyber claims that we have handled.

“Business interruption cover is a critical part of a cyber insurance policy and can be a significant part of any claim settlement. We therefore consider it critical to the cyber insurance market’s continued success to share these experiences so that cyber business interruption and the resulting financial exposures are better understood.”

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