New Cyber Risk Threats Increase the Need for Insurance

Recent warnings and attacks indicate that Cyber Risk, and the need for Cyber Insurance, continue to grow rapidly.  For example, the FS-ISAC has raised the cyber threat level to high:

The Financial Services Information Sharing and Analysis Center, which is widely known as FS-ISAC, raised the cyber threat level to "high" from "elevated" in an advisory to members, citing "recent credible intelligence regarding the potential" for cyber-attacks as its reason for the move. (see here)

Private computer networks are vulnerable, attacks are increasing rapidly, and companies are not taking adequate steps to protect them from hacking according to the US government:

NSA Director General Keith Alexander said the number of computer attacks from hackers, criminal gangs and foreign nations on American infrastructure had increased 17-fold from 2009 to 2011 (see here)

And again Internet Explorer has been found to have vulnerabilities:

Microsoft is urging Windows users who browse the Web with Internet Explorer to use a free tool called EMET to block attacks against a newly-discovered and unpatched critical security hole in IE versions 7, 8 and 9. But some experts say that advice falls short, and that users can better protect themselves by surfing with an alternative browser until Microsoft issues a proper patch for the vulnerability. (see here)

Aggressive risk management, involving continual security review, is critical.  Specific recommendations are widely available, including here.

In addition, Cyber Insurance should be part of any organizations protection.  Because the risks of privacy breaches, data thefts and hacking are rapidly escalating, particularly for small businesses, and the penalties for data breaches are increasing as well (see here), Cyber Insurance has become an essential part of any organizations protection.  But not all insurance agents and brokers are regularly offering this coverage to their commercial clients, and they should be.  Is yours?

Cyber Insurance is not difficult to explain to potential clients, and at least basic protection should be in place.  As a wholesale broker, we provide Cyber Insurance to all types organizations through retail insurance agents and brokers.

 

eSpecialty Insurance is your specialty insurance expert.  We have developed a streamlined marketplace to provide multiple proposals from a range of competitive insurers, along with expertise to help you evaluate your exposures and choose the best combination of comprehensive coverage and price.  We look forward to working with you.

 

Comments

[Eric Stauffer]

In my experience, large companies are best suited for cyber risk insurance because they move at the speed of sloth when it comes to re configuring their computer systems. One large firm I work with, for example, still uses windows 2000. Its amazing they can still do business with partners.

Thanks for bringing this up, because I had forgot about it as of late.

[Insurance Hunter]

There is no doubt that companies and individuals alike are at risk of a cyber attack. And, this is why cyber risk insurance has come to the forefront of the conversation when it comes to protecting yourself online. While new and not widely adopted as of yet, it looks like this could be a major component of insurance policies in the future.

[Doug]

Brave New World... great post - didn't know such a thing existed these days!