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The challenge faced by those who have faced a cyber attack and subsequent losses currently lies in the T’s and C’s of their insurance policy. The costs of the attack to Target is in the region of $290 million, a proportion of which $138 Million, was to settle claims from banks who had to reissue payment cards. From a positive point of view insurance has paid out $90 Million, but the case is a claim by target to get a further portion of losses back through its insurance.
This case is another example of cyber related claims being tested. Whether the claims are under P&C, D&O or pure cyber related polices, the claims being levied are sizable. Some notable cyber attacks over the past 5 years have resulted in significant losses, Maersk, Merck, Yahoo or Norsk Hydro to name a few. With an expectation that insurance policies would cover the losses.
Cases like this and the Mondelez case will I am sure act as test cases and with the insurance industry begin directed by regulators to simplify their policy structures. Will benefit end users in terms of clarifying what will or will not be covered.
The cases may further help in strengthening opinion at the board table for cyber security. Helping to clarify cyber exposure and balance sheet impact.
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