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One does not necessary believe that the question is one of insurers being your friend. The question is one of ‘Is risk transfer your friend’? History shows us that unregulated organisations have typically relied upon insurance as a sole risk transfer solution. Why wouldn’t they, the insurance industry has been actively pushing cyber insurance as a solution to manage cyber risk. Yet its now looking toward governments as a insurer of last resort for systemic risk.
But, and its a big BUT, ‘Right of Bang’ management of cyber risk is not cyber risk management as required by boards to comply with cyber risk management regulation in the U.S and EU. Regulations that not only require the demonstration of cyber risk by boards, ‘Left of Bang’, but also has consequences for cyber insurance.
The challenge for boards with warranties is that like insurance policies, they can be very specific. Given the breadth and depth required to demonstrate cybersecurity regulatory compliance difficult to both attest and assure. Companies would require warranties across many aspect of cybersecurity and risk management.
Financial Services regulators created the Basel accords to mandate risk management of covered bank. For banks to oversight, assure and attest risk management and hold sufficient capital to mitigate risk. It is a model that has been well tried and tested. It is a model that all companies should consider as they move ahead with cyber risk management regulatory compliance, and develop their own risk transfer solutions both left and right of bang, that includes the use of insurance.
@Thaddeus Dziekanowski Brian D. McCarthy
Veritas GRC
#cybersecurity #cyberriskmanagement #cyberinsurance
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