Cyber Risk Insurance & Recent Breaches

Cyber Risk insurance is widely available and inexpensive, but not enough companies are buying the protection.  This is surprising given the number of high profile breaches that have occurred recently.  Two recent breaches garnered significant press:  Eplison & Sony, and many more have been noted in the press.

Epsilon, a marketing firm whose services include permission-based e-mail marketing and database hosting, suffered a massive breach (see here).  Epsilon provides marketing services to some of the largest companies in the US.  It is estimated that the breach resulted in the loss of only names and email addresses.  However, security experts have speculated that this list could increase the responses of phishing emails.

Sony’s breach was significantly more complicated and potentially damaging (see here, here, here and here, and note that this breach is still evolving as this is written):

• The breach appears to be a series of breaches
• Sony took its PlayStation Network offline for nearly two weeks due to an intrusion
• Hackers gained access to databases containing subscriber information for Sony Online Entertainment
• The stolen data includes customer names, e-mail addresses and hashed versions of their account passwords
• Sony discovered a file that makes a clear reference to the “Anonymous” hacking group.
• The breach could impact as many as 100 million of its customers
• Stolen data could be used to spam customers or trick them with phishing e-mails.

Lastly, Kaiser was fined $200,000 for accidentally posting confidential information on 150 individuals (see here).

For some short summaries of a number of other breaches, see here.

Technology coverages encompass a range of exposures, including protection for various types of breaches.  More information is available on the Technology page of our web site (see here).  Often these coverages are combined in one policy – which we call Cyber Risk insurance.

The names can be confusing as well.  A long list of impressive sounding names are used to describe these coverages, including cyber liability, data breach, privacy, hacker coverage, network liability and technology E&O. 

Specialty Insurance Expertise: Tennant Risk Services
Supporting Insurance Entrepreneurship: Tennant Capital Partners

Comments

[Business Insurance]

This is a great news for the small bussiness. I think It is very helpful to us.

[Direct Axis]

Thank you for the great article. This is a kind of insurance that I've never heard of before. It does seem needed if you are active on the internet. There are just too many people looking to steal your online information. Sad but true. Thanks again!

[Commercial Insurance Birmingham]

Great post! I agree that cyber risk insurance is a must for companies because of recent breaches and that more companies should take advantage of it now as it is cheaper. Thanks for sharing

[John Dessommes]

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[Auto insurance]

Nice article