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Recent articles highlight the concerns that lenders have with recent changes in cyber insurance exclusion clauses. Demonstrating cyber insurance and the lack of appropriate coverage, has raised concerns for lenders. Lenders that will be concerned about credit risk exposure and additional regulatory capital, that corporate loan default creates as a consequence of a catastrophic cyber attack. Credit risk that was in significant part alleviated through cyber insurance.
Cyber insurance as the predominant cyber risk transfer tool for boards can no longer be relied upon as the sole means by which companies manage cyber risks. Cyber regulation being introduced by the U.S and EU requires boards of covered entities to implement cyber security risk management. That in itself transfers cyber risk management to the corporate entity and members of the board. Increasing legal and compliance risk and the possibility for board member to face civil and criminal action.
In the enclosed paper we discuss these changes, the effects they will have on boards, the remedial actions that organizations can take to address regulatory compliance, and the opportunities that regulatory compliance creates for cyber insurance coverage.
Thank you Jamie Foster and Aoife Ryan of Hill Dickinson LLP for your introduction. As we demonstrate that cyber regulation transfers cyber risk ‘Left of Bang’, increases legal and compliance risk and requires board to adopt a robust cybersecurity risk management framework. As a tool to manage cyber risk and demonstrate regulatory compliance.
Ted Dziekanowski
#cybersecurity #cyberriskmanagement #governance #regulatorycompliance
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