Legal professionals, including barristers and solicitors, whose professional indemnity policies are set to renew in the next few weeks or months, are being issued an urgent warning to carefully review their cyber risk position, as future policies will carry a total cyber exclusion, exposing them to significant risk.

Robert Gerrard is urging all barristers with a professional indemnity (PI) policy due for renewal on 1 April 2022, and solicitors due to renew on 1 October 2022, to take urgent action to fill the gap in cover that is being left as new PI policies no longer provide cyber risk protection.

What action do I need to take to protect against cyber risks in light of recent regulatory changes?

The way cyber risks are covered or not covered under professional indemnity or other traditional lines policies has changed. It is therefore vital to be aware of precisely what you are covered for in terms of cyber risks.

It may be possible to purchase ‘affirmative cyber coverage’ (explained below) under a non-cyber policy. However, in most cases, a specialist cyber policy is likely to be the best solution to ensure complete coverage. And that is precisely what we are recommending to our clients.

If you are one of our barrister clients whose professional indemnity policy renews on 1 April 2022, or a solicitor client with a policy due for renewal on 1 October 2022, please contact us urgently so that we can arrange cover for you to fill the cyber risk gap.

To update your barristers’ or solicitors’ PI insurance, contact Mark Bayford: m.bayford@robertgerrard.com

If you are an existing Robert Gerrard client in any other industry sector, or you are not yet an existing client but are interested in taking out specialist cyber insurance cover, we are also here to help. Please read on to learn what has changed in the insurance world and why you may be at risk by not having adequate cover for cyber events.

Cyber risk insurance – what has changed?

‘Silent cyber’, otherwise known as non-affirmative cover for cyber risk events, has in recently years been a top focus for insurance providers, brokers and regulators.

The term refers to potential cyber exposures contained within traditional insurance policies which may not implicitly include or exclude cyber risk.

Unlike standalone cyber insurance, which clearly defines the extent of the cover, many traditional policies do not specifically refer to cyber, and could, in theory, be assumed to cover cyber losses in certain situations.

• For policyholders, silent cyber is an issue due to lack of clarity over precisely what is covered, which could lead to confusion or misunderstanding as to their protection from cyber risks. Some policyholders may for example believe they have sufficient cover for cyber risk, when in fact they do not.
• For insurers and regulators, silent cyber could potentially pose a significant and unexpected risk. Insurers with non-affirmative policy wording would not have considered the risk they’d inadvertently covered, and so would not have calculated the policyholder’s heightened exposure and adjusted the premium accordingly.

In 2019, therefore, Lloyd’s of London and the Prudential Regulatory Authority forced insurers to put plans in place to reduce silent exposures. In 2021, this requirement was extended to professional indemnity (PI) and other liability policies.

Many insurers have, as a result, taken the step to clarify their coverage intent by defining what a cyber risk is, and then excluding it altogether from non-cyber policies. All PI policies written through Lloyd’s must now expressly exclude or include cyber risk.

What cyber insurance cover can you offer?

We are offering our legal sector clients specialist cyber cover via CFC Underwriting, a 20-year established insurance solution provider. One of the first companies to offer cyber insurance, award-winning CFC ranks as one of the largest cyber underwriting and claims teams in the world.

Importantly for barristers, CFC is one of the approved insurers on the TLO scheme endorsed by Bar Mutual.

Cover with CFC provides a great deal of added value. As a policyholder, you’ll benefit from round-the-clock access to an award-winning, in-house cyber claims team to guide you through any cyber event. You’ll have technical cybersecurity expertise on hand when you need it, as well as a range of free risk management services to help you prevent, detect and respond to cyber events.

The cover provided by CFC is far more extensive than that provided by current PI policies, and will provide full protection as follows:

Cyber incident response – 24/7 access to a cyber incident response team, plus a network of partners, including IT forensics and security, legal and PR specialists to cover every base following a cyber incident.

Comprehensive cybercrime cover – financial loss cover for a wide range of cyber events, including social engineering scams, invoice fraud, ransomware, targeted extortion, cryptojacking and more.

System damage and business interruption – covering the costs involved in restoring or recreating data, rectifying computer systems and restoring your organisation to full service following a cyber event.

Privacy liability and breach notification – covering third party claims arising out of the loss of confidential data, including the costs involved in notifying affected individuals.

Risk management services – access to a wide range of services aimed at preventing cyber issues before they become a crisis.

<< Download the CFC cyber cover brochure >>

Why is cyber insurance so important for the legal sector?

One of the top ten risks for UK businesses identified by the Allianz Risk Barometer report at the end of 2021 was cyber incidents.

The issue of cybercrime should be of growing concern to every business, in particular those in the professionally regulated sector where high volumes of sensitive client data and client money are held. Such organisations face an increased threat, and it is no surprise that cyber-attacks on the legal sector are on the rise.

Such attacks can take many forms, and they are becoming increasingly sophisticated. Phishing emails and business email compromise are amongst the most common, as are system hacks, denial of service attacks, data breaches and ransomware.

“According to the Information Commissioner’s Office (ICO), the legal sector is one of the top five reporting data security incidents.”

In 2018, the National Cyber Security Centre (NCSC) issued its first legal threat report to the industry, revealing that 60 per cent of law firms had reported an information security incident in the 12 months leading up to the report, and that £11 million of client money had been stolen in the same period.

The Bar Standards Board (BSB) believes that barristers are just as vulnerable to cyberattacks as solicitors and, as reliance on technology continues to increase amongst the Bar and within the court system, data security remains an area of significant risk.

Cyber insurance is vital for every business – are you adequately covered?

Every business, of every size and in every industry, is potentially at risk from cybercrime. Remember, professional indemnity and other traditional lines policies will no longer cover you in the way they used to. A purpose-designed policy is the only way to satisfy yourself that you are adequately safeguarded against the ever-growing world of cyber risks.

REMINDER: If you are one of our barrister clients whose professional indemnity policy renews on 1 April 2022, or a solicitor client with a policy due for renewal on 1 October 2022, please contact us urgently so that we can arrange cover for you to fill the cyber risk gap.

To update your barristers’ or solicitors’ PI insurance, contact Mark Bayford: m.bayford@robertgerrard.com

If you are an existing Robert Gerrard client in any other industry sector, or you are not yet an existing client but are interested in taking out specialist cyber insurance cover, we are also here to help.

For a non-legal sector cyber insurance quote, please contact Gary Atkins: g.atkins@robertgerrard.com

We are here to help, and look forward to being of assistance.