Reading time: 6 minutes
Listening time: 12 mins

Welcome to the Pride's Friday Five

Every Friday the team rips through 200+ insurance, legal, and market-risk articles into three signals your board can act on Monday morning.

One major issue has our attention this week:

• Non-Damage Business Interruption has produced five events since 2017 with losses ranging from billions to trillions. 92% of S&P 500 value is now intangible, but most BI policies still require physical damage to trigger. The gap is measured in trillions and widening every quarter.
• Your cyber policy's "period of restoration" definition may be the most consequential clause you've never read. Cyber carriers are asserting network-restoration cutoffs that stop payments weeks before business operations actually recover. The difference between "operations-focused" and "network-focused" language is outcome-determinative.
• And our co-founder FLIP pins a piece on Parametric Insurance as a possible partial solution to this issue very few seem to be thinking deeply about!

Two pieces around this issue and one possible solution we think deserve a deeper dive…First, If you'd rather listen check out the audio version.

Nothing Burned. Nothing Flooded. The Losses Hit Trillions.

Summary

$10 billion. $5.4 billion. Tens of billions from a freak single ship mishap. None involved a damaged building.

Five events since 2017 define the exposure class every financial institution needs to understand: Non-Damage Business Interruption. NotPetya hit Maersk, Merck, and FedEx simultaneously in 2017, reaching $10 billion in global damages without touching a server room. The Ever Given ship that blocked $9 billion per day in trade for six days in 2021. COVID-19 shutdowns cost U.S. small businesses an estimated $255 to $431 billion per month. The 737 MAX grounding parked revenue-generating assets on tarmacs worldwide. Then CrowdStrike's single faulty update in July 2024 crashed 8.5 million devices and hit Fortune 500 companies for $5.4 billion. Only 10 to 20 percent was insured.

The math underneath is stark. By 2025, 92% of S&P 500 market value is intangible, up from 17% in 1975. The entire economy inverted from physical assets to non-physical ones. But most business interruption policies still require physical damage to activate.
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​For financial institutions, the concentration is even more acute. A regional insurer's core operations run on cloud infrastructure, third-party claims platforms, and real-time payment systems. A single vendor outage, grid failure, or regulatory freeze can halt revenue without triggering a single coverage provision.

(source: LION Specialty Market Analysis)

So what?

It's good for all sides, carriers and clients, to understand that this mismatch exists.

Exclusions are tightening, carve-outs are multiplying, and sub-limits most insureds never read are appearing in renewal documents. The distance between what can shut your business down and what your policy actually covers is widening every quarter. If nothing burns, nothing pays. And for any financial service business running digital-first operations on legacy insurance programs, NDBI isn't a theoretical risk category. It's a documented pattern with a coverage gap measured in the trillions. ​
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​Monday morning question for the board: when was the last time someone mapped our actual interruption exposures against our actual policy triggers? The LION team would be happy to run that analysis with you!

The Three-Word Clause That Truncates Your Cyber Recovery

Summary

After a ransomware attack, does your cyber policy pay for lost income until your business actually recovers, or only until someone flips the servers back on?

The answer depends on three words buried in your policy's "period of restoration" definition. A Law360 analysis published this week highlights a critical and often overlooked distinction: cyber policies with operations-focused restoration language cover losses through the full resumption of normal business activity. Policies with network-focused language stop the clock the moment computers come back online, even partially.

Munich Re reported last year that business interruption constitutes the largest share of costs in ransomware claims. That makes the restoration period definition one of the most consequential clauses in any cyber program. Meanwhile, AI-driven attacks continue accelerating. Group-IB published findings in January 2026 documenting weaponized AI fueling what they call the "fifth wave" of cybercrime. Unit 42 identified generative AI being used to build threats that deploy after victims visit seemingly safe webpages. Attack frequency and sophistication are rising. The clause that determines how long your policy pays deserves attention now.

(source: Law360, Scott Godes, Barnes & Thornburg LLP)

The LION Lens

What happened — Cyber carriers are asserting that business interruption payments end when computer networks are technically restored, regardless of whether policy language references broader business operations (source: Law360).

Why it matters — The distinction is outcome-determinative. Operations-focused language covers degraded workflows, manual workarounds, customer churn, vendor reintegration, and backlog remediation. Network-focused language treats partial server restoration as the finish line.

Practical implications — Policies with "could have been restored" language invite hindsight denials based on theoretical timelines rather than real-world recovery dependencies. Forensic accounting reports tied to network restoration rather than business operations can quietly truncate the loss window weeks before revenue actually returns to pre-incident levels.

So what?

Cyber incidents rarely end when a green light turns on in the data center.

After systems come back online, institutions face data validation, reconciliation, reindexing, user recredentialing, and third-party reintegration. Manual workarounds reduce throughput and increase error rates. Customer and vendor approvals gate the reconnection of interfaces and data flows. Ramp-up periods often run weeks to months. All of this corresponds to the same incident that triggered the outage.

Payment windows in cyber policies typically run 60, 120, or 180 days. But the real question isn't the outer boundary. It's whether the carrier can cut off payments at an earlier date based on the restoration period definition. Black-letter insurance law in multiple states holds that when a carrier could have written narrower language but chose broader terms, the broader interpretation controls.

For financial institutions, this isn't abstract contract law. It determines whether your next cyber claim pays for the full operational impact or stops at partial network recovery.

The LION POV

Here's how we're advising clients:

• Pull your cyber policy's restoration period definition before renewal. Identify whether it references "business operations" or "computer network/system restoration." If it's network-focused, manuscript broader language. The time to negotiate is now, not after a claim.
• Scrutinize forensic accounting assumptions during any active claim. If the insurer's forensic accountant ties the loss window to network restoration rather than business operations under a policy with operations-focused language, push back. The policy language should control the analysis.
• Map your actual recovery timeline against your policy structure. Most institutions underestimate post-restoration operational drag. Quantify what "back online" actually means for revenue, staffing, vendor reintegration, and customer trust. That documentation strengthens both renewal negotiations and future claims.

The distinction between "restored" and "recovered" is where coverage meets reality. Make sure your policy language reflects how your institution actually operates.

Want to discuss how your cyber policy's restoration language affects your institution? Contact LION Specialty for a confidential review.

Parametric Insurance Isn't Coverage. It's a Liquidity Weapon.

Summary

Most financial institutions still treat insurance as a reimbursement mechanism.

File a claim. Wait. Negotiate. Wait longer. A complex FI claim can take well over a year to fully adjust while your balance sheet absorbs the full impact.

Parametric insurance compresses that timeline to days. A pre-defined trigger fires, verification confirms it, and payouts arrive within 5 to 14 business days. The traditional adjustment apparatus — adjusters, coverage debates, reserve negotiations — never enters the picture.

Actual capital hits your balance sheet when the damage is fresh and the need is acute.

The capacity already exists. Swiss Re, Munich Re, and specialty carriers like Descartes can deploy up to $200 million per policy. Parametrix has launched enterprise solutions backed by $50 million in Lloyd's syndicate capacity covering IT outages, cloud failures, and payment gateway disruptions. The infrastructure is live.

The question is whether your renewal strategy accounts for it.

(source: LION Specialty Market Analysis)

So what?

Most CFOs miss a fundamental equation: the value of insurance isn't the dollar amount on the check. It's the dollar amount multiplied by when it arrives. A $10M payout in two weeks during a liquidity crisis is worth more than $12M arriving months later, after you've drawn credit lines, deferred projects, and burned through reserves.

Parametric layers also offer a structural answer to the retention problem.

Retentions expanded significantly across cyber, D&O, and professional liability during the 2020–2023 hard market cycle. Most institutions treat elevated retentions as an unavoidable cost. A parametric layer beneath your traditional retention catches the frequent, systemic shocks that hit every 12 to 24 months. Regional weather events. Grid disruptions. Cyber incidents below your primary threshold. The parametric premium buys something reserve capital never delivers: a defined trigger, a defined payout, and a timeline measured in days.

The coverage exists. The trigger mechanisms are proven. The only question is whether your next renewal includes this conversation.

The Bottom Line

The economy runs on intangible assets, digital infrastructure, and interconnected systems. The insurance architecture protecting it was built for buildings that burn. NDBI quantifies the exposure in trillions, restoration period language shows how recovery gets truncated even inside policies designed to cover it, and parametric capacity offers a speed-of-capital answer the traditional model cannot match.

In Case You Missed It!

Friday is for market signals. Wednesday is for structural intelligence, insider to insider.

This week’s Wednesday Intelligence kicked off a miniseries on deepfake risk for financial institutions. “What Happens When Bad Guys Deepfake Your CEO (Part 1)”

A finance director joins a video call with his CFO, his CEO, and two colleagues. None of them were real. $25.6 million. Fifteen transactions. Gone. We broke down the Arup case, why FIs are uniquely vulnerable (your executives sit on hundreds of hours of public audio and video that serve as training data for synthetic clones), and the six renewal questions every institution should be asking about social engineering coverage, AI exclusions, and callback verification protocols.

Part 1 is live now. [Listen here / Read here]
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​Stay Covered Out There Y'all,

TASH & FLIP

Co-Founders and Managing Partners

LION Specialty