Airmic chairman Mark Butterworth has sounded a warning bell about the insurerance industry's ability to tackle the growing menace of ecommerce risks.
Speaking after ABI's Mary Francis said insurers were responding to new risks, Butterworth complained about the dearth of either initiative or impetus from insurers.
He said: "Alarm bells are ringing about the markets' ability to tackle ecommerce risks, particularly business interruption. They are happy with a fire in your server but not if there is a bug in your server."
And he criticised insurers for using old policies based on fire and other perils and then trying to overwrite them to cover new risks. He also said insurers were too slow to adapt. "Everyone is talking about moving at internet speed and yet you tell an insurer to change its policy wording and that would normally take a year but we're now saying it has to be in a couple of months," he said.
And Butterworth warned insurers not to back away from the cover. "Ecommerce exclusions appearing across policies, like the insurers did with Y2K exclusions, is not the answer," he said.
Airmic's survey found that 95% thought the market inadequate. Only 27% thought they were currently adequately covered and just 20% thought insurance products were adequate. Brokers had done their best with 60% of respondents saying their broker had provided some help.
