Pay More, Get Less: Cyberinsurance Now a Nightmare for Law Firms
March 1, 2022
Yes, the Sky is Falling
Ever since cyberinsurance came on the scene, law firms have been fretful about the rising costs. Through most of 2021, we were seeing price increases of 30-40%. But according to global insurance company Marsh, the price of cyberinsurance in the U.S. grew by a stunning 130% in the 4th quarter of 2021. Commercial insurance, by contrast, rose only 13% in the final quarter of 2021. The cyberinsurance carriers will say that the market was undervalued to begin with, and the increases are value adjustment corrections.
Insurance companies often have reinsurance policies they buy to protect themselves from steep claims – and the price of reinsurance has increased as well, further spooking insurers, some of whom have withdrawn from offering commercial insurance, leaving less capacity in the marketplace.
Basically, we’ve been watching a train wreck in cyberinsurance, with no end in sight.