{"id":11786,"date":"2024-10-29T14:28:50","date_gmt":"2024-10-29T19:28:50","guid":{"rendered":"https:\/\/www.bbrown.com\/?post_type=insight&p=11786"},"modified":"2025-03-06T13:02:20","modified_gmt":"2025-03-06T19:02:20","slug":"cyber-physical-damage-insurance-2","status":"publish","type":"insight","link":"https:\/\/www.bbrown.com\/us\/insight\/cyber-physical-damage-insurance-2\/","title":{"rendered":"Cyber: Physical Damage Insurance"},"content":{"rendered":"

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Property & Casualty<\/p>\n

\n Cyber: Physical Damage Insurance\n <\/h1>\n\t\n <\/div>\t\t\t\t\t\n\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t<\/div>\n\n\t<\/div>\n\n\t\n[\/vc_column][\/vc_row][vc_row][vc_column width=”2\/3″]\n
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\n Cyber: Physical Damage Insurance\n <\/h1>\n\t\n <\/div>[vc_column_text css=””]Cyberattacks can cause physical damage, including fire, explosions, and other effects usually covered by property programs. Cyberattacks or failures can also cause disruptions in process controls or communication components of critical infrastructure such as water pumps, pipeline valves and industrial environments (e.g., SCADA). These events can impact safety and security functions in building controls, such as forcing an autonomous vehicle off the road. The Lloyd\u2019s 2022 report, \u201cShifting powers: physical cyber risk in a changing geopolitical landscape,\u201d provides several scenarios detailing physical cyber risk that has already caused damage in the real world1<\/sup>.<\/p>\n

Cyber insurance typically excludes physical and property damage, and property and casualty insurance have often amended their policies to limit coverage for types of physical damage caused by cyber events. Insurance purchasers can review their programs to ascertain if there are gaps and understand their exposures to uninsured cyber-caused physical loss. For those with coverage gaps, the insurance markets have created a stand-alone solution.<\/p>\n

Carriers have created facilities blending property and cyber market coverages to fill gaps created by cyber exclusions on property and cyber policies. The main three options include the following:<\/p>\n