Every answer and its explanation appears here once you have finished the path. Each one then links to the matching glossary entry, where the concept is set out in full with its worked example.
1. A 2017 property policy mentions cyber nowhere. What does the word "silent" applied to it describe exactly?
An uncertainty about cover, not an absence of cover: the answer will depend on how general clauses are read, and that reading belongs to somebody
The word names a state of the question and not a state of the cover, which is why it matters who owns the interpretive risk. The absence of cover answer closes the question one way, when a definition of physical damage or an inherited exclusion may make the policy respond. The implicit cover answer closes it the other way, applying a general rule to clauses written for other facts. The drafting fault answer judges retrospectively contracts written correctly at a time when the risk did not exist in this form, and teaches nothing about the file's outcome.
Glossary entry →2. Silent cyber has two consequences that must be held together. Which are they, and who is right?
An unpriced exposure for the insurer, whose premium was computed without this risk, and an unreliable cover for the insured, who will have to argue for it: both are right at once, and nobody gains
Most accounts keep only one half, and holding both is what explains why the market dealt with it. The pro-insured answer confuses being covered with being able to argue you are, which is not the same thing when the cash is short. The pro-insurer answer forgets that the question will be settled by a third party, on words whose reach the insurer did not choose. The symmetry answer treats uncertainty as a fair bet, when both parties genuinely lose, one a premium, the other reliability.
Glossary entry →3. How is this problem worse than an exposure that is merely badly assessed?
A badly assessed exposure is corrected at renewal once measured; this one is not measured, being spread across property, transport, liability and crime policies none of which carries a cyber code, so an insurer measures its affirmative accumulation finely and ignores the other, which would occur on the same event
What separates the two situations is the very possibility of measurement, not the size of the figure. The amount answer asserts an inequality nothing supports and that varies between portfolios. The age answer names a real interpretive difficulty, which bears on the outcome of a file and not on an insurer's ability to know what it carries. The merging answer forgets that the two accumulations live in lines that do not talk to each other, and that reinsurance bought on the affirmative accumulation alone stays bought on an incomplete figure.
Glossary entry →4. Two insurers carry the same twenty-million silent exposure. One knows it, the other does not. What really separates them?
Three options: the one who knows can keep it, reinsure it or withdraw it, which is a decision; the one who does not has none of the three, and its reinsurance was bought on a figure that ignored it
Invisibility is the real defect, more than the missing premium, and this comparison exists to show it. The premium answer keeps the most visible and least serious consequence: a known unpriced exposure remains steerable, an unknown one does not. The nothing before a loss answer confuses the risk carried, which is identical, with the insurer's position, which is not, since one bought its protection knowingly. The imposed exclusion answer describes a later market movement, which changes nothing in contracts already running.
Glossary entry →5. Two things silent cyber is not, and is often taken to be. Which?
A drafting fault to be held against anyone, these policies having been written correctly for their time; and an old phenomenon dying out, the same mechanism restarting with each new risk contracts do not yet name
The lesson sets both confusions aside together because they lead to the same useless move, hunting for someone to blame or waiting it out. The underwriting fault answer is the most tempting and runs into the same fact: you do not rate a risk you do not know you carry, and invisibility is at issue, not negligence. The extinction answer takes the example for the family: cyber is the best-documented case of a mechanism that will recur. The French market answer confuses a question of contract drafting, which is universal, with the existence of market clauses in one place.
Glossary entry →