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From the Front Lines: Cyber Liability

"Cyberattacks are only going to continue to increase," says independent agent Evan Bundschuh. "In response, you're going to see more and more vendors and business partners requiring cyber insurance."
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From the Front Lines: Cyber LiabilityEvan Bundschuh

Commercial Lines Manager

Gabriel Bundschuh & Associates Inc.

Scarsdale, New York

How did you get started at your agency? 

We are a third-generation family-owned boutique brokerage and I am third in line, so I was pretty much born into the insurance industry. We began as a predominantly personal lines and small commercial agency. While we still write a lot of smaller commercial and affluent private clients, I shifted the agency toward specialty lines to focus on professional, management and cyber liability insurance. 

Why cyber insurance?

It is an exciting area where you can stand out as a specialist—something my father always stressed the importance of. I also thought diversifying our agency to include a specialty would be good for our longevity.

With so many carriers going to direct quote platforms, the emergence of InsurTech platforms, and many agencies being acquired, it seemed like larger small businesses and mid-market companies had very few options for more complex coverages, such as cyber and directors & officers.

Challenges in the cyber market?

Cyber is a difficult product and there's a lot of differentiation from carrier to carrier. The market is rapidly evolving with new endorsements constantly being added and carriers changing their appetites and underwriting requirements. I also think one of the main challenges will be the ability of agents and insurers to keep up with rapid movement in artificial intelligence (AI).

Future trends in the cyber liability insurance market? 

Cyberattacks are only going to continue to increase. In response, you're going to see more and more vendors and business partners requiring cyber insurance. Additionally, I think we're going to continue to see more cyber privacy regulations being passed, creating more compliance challenges and regulatory exposures for insureds.

From an underwriting perspective, carriers will likely require security controls from their insureds in order to qualify for coverage. From a coverage perspective, it will be interesting to see what the future holds for cyber catastrophe losses. Will carriers be able to absorb them? Or will it ultimately result in the formation of a federally backed program?

Advice for a fellow agent in the cyber liability market?

Immerse yourself in it. Read as much as you can, join an organization like Professional Liability Underwriting Society (PLUS), consider getting a designation, and talk to as many experts in the industry as you can.

Olivia Overman is IA content editor.

Monday, October 30, 2023
Cyber Liability
Big I Markets