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Oct 12
Why Cyber Liability “Pay on Behalf of" Provisions Matter More Than Ever

When reviewing cyber liability policies for your clients, limits and coverages are compared. How a carrier will respond to the claim is also important. Whether the carrier will “pay on behalf of" or “indemnify" is a significant feature your clients should consider when selecting cyber liability coverage.

Under an “indemnity" provision, the policyholder is subject to paying damages and defense up front, out of their own funds, and then seek reimbursement from the carrier. According to Coalition's H1 2021 Cyber Insurance Claims Report, the average ransom demand increased 170% exceeding $1M in Q1 of 2021. If choosing a policy with an indemnity provision for Ransomware coverage, clients should consider if they have the assets to pay the claim out-of-pocket before being reimbursed by the carrier.

Many cyber policies apply “pay on behalf of" provisions to a few coverages but may only “indemnify" for coverages such as breach response costs, cyber extortion and/or ransomware.

Coalition's policy is among the only policies in the market applying "pay on behalf" across every single coverage — at a time when cash is especially precious, policyholders never have to pay losses or claims expenses out of pocket. Policyholders also benefit from free breach response services, a 24/7 in-house Incident Response Team, and free cyber security tools – all industry firsts!

Limits can be quoted up to $15 million for commercial risks with up to $1 billion in revenue. Coalition's products are offered with the financial security of Swiss Re Corporate Solutions, Arch Specialty Insurance Company, Argo Pro US & Lloyd's of London.

Log into Big "I" Markets to quote Coalition for your commercial book and access resources such as client-ready marketing, claim & limit calculators, and coverage comparisons. Reach out to the Big “I" Markets Cyber Insurance Program Manager, Carla McGee, if you have any questions or would like to walk through a quote.

​127 South Peyton Street
Alexandria VA 22314
​phone: 800.221.7917
fax: 703.683.7556

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