Increased Cyber Risk Leads to more Cyberinsurance
June 27, 2011
Insurance Journal reported on June 15 that a recent increase in corporate security breaches is pushing some many companies to opt for cyberinsurance for increased risk mitigation. The article notes that the US Senate, the International Monetary Fund, Lockheed Martin Corp., Citigroup Inc., Google, and Sony Corp. are among the various institutions that have experienced cyber attacks. When a cyber attack occurs, cyberinsurance can cover things such as civil suits, fixing computer systems, providing identity theft services to customers, fines from governments and regulators, or civil suits. In addition, cyberinsurance can cover mundane things that are necessary in such an event, such as sorry letters to customers.
However, with an average data breach claim of $7.2 million in 2010, insurance companies carry exclusions for things such as us incidents involving unencrypted laptops, computers that don't receive regular updates, etc. Unfortunately for now, companies offereing cyberinsurance are having a difficult time regulating the industry, because there are no set standards, unlike the auto industry where it is possible to require people wear a seat belt. Insurers, however, are confident that that will change.
For more information, take a look at how Travelers Insurance manages CyberRisk, or call today at 508-540-2400.