At the opening of the British Insurance Brokers’ Association conference in Manchester, Mactavish said its research had identified eight common flaws in cyber insurance policies.

The flaws, set out in its Cyber Risk & Insurance Report, includes, for example, cover being limited to events triggered by attacks or unauthorised activity and excluding cover for issues caused by accidental errors or omissions. Another flaw is only providing systems interruption cover for the brief period of actual network interruption, as opposed to the more significant knock-on revenue impact during the period after IT systems are restored but the business is still disrupted.

In the last two weeks, Mactavish has reviewed cyber insurance policies for a large British business and a medium-sized business. Both of these policies had three or more of the flaws.

Chief executive officer Bruce Hepburn said: “Many in the industry have challenged our findings but we continue to find these issues affecting the actual policies we review that are being offered to UK businesses, and we will be publishing a second paper on the sector next month providing more details on our findings.

“However, in the meantime, we are calling on brokers to challenge insurers more on the quality of the cyber cover they provide and push for improvements. If they can’t achieve this, they need to warn their clients of the omissions in their policies to give them a better understanding of what they are buying.”

Mactavish has issued a challenge to insurers and brokers to guarantee that the eight common flaws it has identified in policies will never be used as reasons to refuse pay-outs on cyber insurance claims unless they can show that a client has been informed but decided not to buy the additional cover.