On May 15, 2019, President Donald Trump issued Executive Order 13873, “Securing the Information and Communications Technology and Services Supply Chain,” which prohibits high-risk information technology transactions with entities under the jurisdiction of a “foreign adversary,” as determined by the Secretary of Commerce. While the executive order will affect buyers and sellers in a variety of industries, it’s influence may even extend to cyber insurance litigation. 

One area that may be affected is the interpretation of the standard war exclusion included in most cyber insurance policies as it applies to cyber hostilities. Specifically, the executive order may be interpreted as conflating private entities in foreign adversary jurisdictions with the foreign adversaries themselves, which could significantly broaden the range of entities that trigger the war exclusion under the terms of many cyber insurance policies. This could lead to a wave of coverage denials under the war exclusion and potentially a reconsideration of this standard policy language in the context of cyber.

To read the full article, go to Forbes