Continuing uncertainty surrounding the application of cyber-exclusion clauses is eroding the value of insurance and causing mounting concern among global energy firms, according to Marsh’s latest Energy Market Monitor, released Wednesday.

The inclusion of so-called “CL380 clauses,” which are currently imposed across a broad range of energy insurance policies, means that insurers may deny energy firms’ claims for physical loss or damage stemming from cyber-related incidents, regardless of whether they are accidental or malicious.

Insurance capacity for energy firms has remained largely buoyant in 2013 due to the continued absence of a market-changing event and the arrival of new entrants fueling competition.

“The global energy sector has not experienced physical damage to facilities or disruption to supply that has been attributed to a cyber-related event, which is testament to its aggressive approach to risk management,” says Andrew George, chairman of Marsh’s Global Energy Practice, but “the current situation is clearly unsustainable,” he adds, referring to the presence of “CL380 clauses.”

“A cyber-related incident could potentially have catastrophic consequences,” he adds. “Insurers must deliver innovative products that offer coverage which responds to the changing risk profile of the energy industry—not only to stay relevant but to help their clients continue to be successful.”

Marsh’s Energy Market Monitor reports that beyond cyber terrorism threats, the key risks facing the energy sector today are changes in the geopolitical environment, the development of new technologies and the sheer scale of the new projects.

Larger projects are putting pressure on the upstream construction market. They may be few and far between, but the largest offshore projects are challenging market capacity. The market is facing a dilemma: There is too much capacity for most risks, but not enough for a few.

“Many pundits expect recent losses to bite hard,” and there is talk, particularly in the downstream energy market, “that we are one or two losses away from seeing carriers withdraw from the sector,” the report notes, adding that Marsh disagrees with this assessment.

Over the last 12 years, the energy market has shown incredible resilience and overall strong underwriting discipline—and Marsh expects that strength to continue. While prices in various segments may be going up or down, the deviation factor has shrunk, the report says.