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SECTOR FOCUS: MANAGEMENT LIABILITY
Where cyber meets management liability What coverage do clients need in an increasingly litigious business world?
IN TODAY’S fast-paced landscape, the risks for businesses are evolving at lightning speed. The prevalence of litigation is helping management liability cover to increasingly become a must-buy for businesses looking to protect themselves from exposures. While management liability and directors and officers (D&O) cover are often used interchangeably, the differences between the two are becoming ever more important, says Kate Lyes, management liability practice leader at CFC Underwriting. D&O “does what it says on the tin”, covering directors and officers, and any subsequent liability that arises out of wrongful acts that they might commit in the process of running the company, Lyes says. Management liability, however, encompasses a wide range of coverages. “Management liability tends to be used more in conjunction with private companies,” Lyes says. “It’s more all-encompassing –
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covering not only the directors and officers, but the entities themselves.” Important areas of coverage include employment practices liability, employee benefits liability, commercial crime, kidnap
need to be aware of most is their cyber exposure,” Lyes explains.
Businesses under threat Cybercrime and cybersecurity issues have barely been out of the news headlines in recent years. Most prominently, two major Yahoo breaches came to light last year, putting the company in the glare of the global spotlight. The first saw 500 million user account details exposed, and was thought to be the largest single data breach in existence until it was eclipsed by news of a second breach just two months later. Details of the second breach, which came to light in December, revealed that data from over one billion Yahoo user accounts was compromised by a third-party back in August 2013. But it’s not just those on the other side of the Atlantic who are facing a threat from cyber criminals. The infamous TalkTalk hack, which lost the firm 101,000 customers and cost £60m, is the stuff of nightmares for many businesses in the UK. But new research has given them even more reason to worry.
“The reality is that, certainly from a management liability perspective, one of the things that brokers and directors of companies need to be aware of most is their cyber exposure” Kate Lyes, management liability practice leader at CFC Underwriting and random and, increasingly, some kind of cyber and privacy cover. “The reality probably is that, certainly from a management liability perspective, one of the things that brokers and directors of companies
Businesses in the UK faced an average of 230,000 cyberattacks each in 2016, according to a report by internet service provider Beaming. In November last year, the firewalls of individual companies battled up to