Waiting Period – Cyber Business Interruption
The waiting period is the time-based deferment that must elapse after the onset of a cyber-related business interruption before cyber BI cover responds.
- Clause type
- Condition
- Origin/Market
- International programme
- Favours
- Insurer
- Negotiability
- Negotiable
Purpose
Cyber business interruption cover is meant to replace lost income following a system outage, not every brief, quickly resolved disruption. The waiting period acts as a temporal de minimis threshold: cover only responds once an outage exceeds the agreed number of hours (market standard 6–24 hours, commonly 12 hours). This keeps trivial incidents out of scope and avoids administrative handling of minor events.
Effect and limits
Two structures dominate the market. As a pure “time-based retention”, income loss during the waiting period is simply forfeited and indemnity begins only afterwards. As a “qualifying period”, by contrast, the waiting period only acts as a trigger threshold: once exceeded, the policy responds retroactively from the first minute of the outage — considerably more favourable to policyholders. A separate monetary deductible frequently also applies, with the greater of the time-based or monetary retention being deducted. The waiting period regularly also governs contingent BI cover where a service provider is affected.
Negotiation and practice
At placement, it should be clarified whether the waiting period operates as a time-based retention or as a qualifying period, since this distinction can materially change the indemnity amount for longer outages. Policyholders with high revenue sensitivity per hour should seek a shorter waiting period (6–8 hours) and check whether different waiting periods apply to the insured’s own systems versus a service provider’s failure.