• Insurance Against Cyber Attacks Expected to Boom

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    Sony is still awaiting the final tally for losses related to its data breaches earlier this year. At last count, it had 100 million compromised customer accounts, and Sony anticipated the debacle would cost $200 million. With 58 class-action suits in the works, that may be wishful thinking.

    But what about Sony’s insurance coverage?

    In a lawsuit filed in July, Sony’s insurer, the Zurich American Insurance Company, said the company did not have a cyber insurance policy. It said Sony’s policy only covered tangible losses like property damage, not cyber incidents.

    Jim Kennedy, a Sony spokesman, said that Sony has coverage for “significant portions” of the losses from the data breaches. “Sony’s coverage includes multiple cyber insurance policies for operations around the world, traditional general liability policies, and property insurance policies that contain express provisions covering damage or disruption to electronic data,” Mr. Kennedy said in a statement. “Sony has already received payments from some of its insurers, and is actively pursuing claims for additional payments.”

    But despite high-profile cyber attacks at Sony, Google, Epsilon, RSA and others this year, only a third of companies surveyed by Advisen, a research group, say they have purchased a cyber insurance policy.

    “That’s cyber insurance in a nut shell,” said Jacob Olcott, a principal with Good Harbor Consulting’s cybersecurity team. “Everybody needs it, and most companies don’t realize they don’t have it until it’s too late.”

    Experts say that more companies will buy policies in the coming year because of new Security and Exchange Commission requirements. Last October, the S.E.C. issued a new guidance requiring that companies disclose “material” cyber attacks and their costs to shareholders. The guidance specifically requires companies to disclose a “description of relevant insurance coverage.”

    for the full article in the New York Times please link HERE

    Diversified Insurance Group is expert at providing advice and coverage options for technology companies to cover their cyber risks. We have been providing risk management solutions to technology companies for nearly 20 years.

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This entry was posted on February 3, 2012 at 12:51 pm
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