Content taken from Andrew G. Simpson’s May 2021 article in the Insurance Journal and is a reformatted post
While a typical business interruption can often be a confusing insurance situation, the picture gets even muddier when it involves cyber coverage.
According to Chris Mortifoglio, who is a Certified Public Accountant and a Certified Fraud Examiner (CFE), understanding the “nuances and differences” of a cyber insurance business interruption exposure or claim compared to a traditional one is more important now than ever.
“I will tell you that in my experience business interruption is often the most misunderstood part of property coverage. Part of that has to do with the fact that it can be very subjective. If you have 10 accounts looking at the same set of financial data, you’ll oftentimes receive 10 different calculations or estimates of what a business interruption loss might be,” said Mortifoglio, who has been dealing with business interruption exposure assessments and claims for more than a decade as the director of forensic accounting at Procor Solutions and Consulting in New York.
A cyber business interruption risk can be difficult to estimate and manage. To further the understanding of cyber BI, Mortifoglio identified five areas where cyber BI differs from traditional BI: period of measurement; period of restoration; personnel involved; geographic constraints, and reputational risk.
1. PERIOD OF MEASUREMENT
2. PERIOD OF RESTORATION
3. PERSONNEL INVOLVED
4. GEOGRAPHIC CONSTRAINTS
5. REPUTATIONAL RISK
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