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Insurers costs continue to rise as a big case is lost

A New Jersey court has ruled in favor of Merck in a lawsuit the pharmaceutical company filed against its insurer, Ace American, which declined to cover the losses caused by the NotPetya ransomware attack.

Ace American refused to cover the losses, citing that the NotPetya attack was part of Russian hostilities against Ukraine and, as a result, was subject to the standard “Acts of War” exclusion clause that is present in most insurance contracts.

In a ruling last month, spotted by Lexology, the New Jersey Superior Court has sided with Merck and its strict interpretation of the Acts of War clause.

Joseph Brunsman, who focuses on the insurance space, has offered some projections for the insurance market for 2022.   Employment Practices Liability (Up 5% to 20%), Cyber Insurance (Up 40% to 50% for Optimal Risks. Up 50% to 100% for less Optimal Risks), and Tech E&O (Up 40% to 50% for Optimal Risks. Up 50% to 100% for less Optimal Risks).

Why do we care?

The state of play is poor for the insurers, which will trickle down to providers and customers.    How much can the market bear?    It seems the insurers think 50 to 100%.