Descartes adds new triggers and liability cover to cyber shutdown product

By Henry Gale

March 13 - (The Insurer) - Parametric insurance specialist Descartes has begun offering its cyber shutdown insurance policy in Spain and extended the product's coverage, the company has announced.

The product, launched in France and Germany last year, initially covered mid-sized and large businesses against encryption attacks that shut down their systems.

Now, the policy's triggers have been extended to include any malicious intrusion detected within an insured's IT systems that causes a business shutdown.

The parametric payout is determined by the number of days of disruption. It can be used for crisis response costs and business interruption losses, as well as other risks that are not usually covered by cyber insurance such as contractual penalties or perishable goods.

Descartes has also added optional cover for third-party cyber liability risks, which is not parametric and aligns with other products in the market.

"After one year of commercialisation, we had the feeling that it was the right time to do some adjustments based on the feedback of the market, to enlarge the number of clients that will be attracted by the product," Kevin Dedieu, Descartes' co-founder and chief scientific officer, told Cyber Risk Insurer.

Dedieu said that the penetration of cyber insurance is very low in the markets that Descartes is targeting. The buyers of its cover so far have predominantly been new to cyber insurance.

Dedieu added that Descartes had been in discussions with clients about incorporating the cyber shutdown cover into risk retention vehicles such as captives and virtual captives.

"It fits well because (the cyber shutdown cover) is short-tailed," he said, "whereas a standard cyber product is not really short-tailed on the liability part."

Descartes Underwriting was founded as an MGA in 2018 and launched full-stack insurer Descartes Insurance in 2022.

Descartes Insurance underwrites the parametric cyber shutdown cover, which the firm recently said contributed to the group's gross written premiums exceeding $200 million in 2024.