Many cyber insurance policies will leave business ransomware victims out of pocket
Businesses are being warned to carefully check their cyber insurance policies and their appropriateness as many do not provide important cover for common attacks, such as the damage to revenue and profits from ransomware attacks.
Analysis by Cyber|Decider, the cyber insurance comparison engine that covers policies accounting for 80% of the UK market, found that the variability of policies meant many businesses will be getting insurance that does not cover them for such key risks.
For instance, Cyber|Decider’s research shows that about a quarter of cyber insurance policies reviewed would not adequately cover businesses for the loss of revenue from such attacks, yet for many organisations this is likely to be by far the biggest cost.
A recent Lloyd’s of London report “Closing the gap: Insuring our business against evolving cyber threats” found that ransomware was one of the three biggest cyber threats to businesses in such sectors as: IT, professional services, healthcare, public sector, education, media, transport, hospitality and utility sectors.
Neil Hare-Brown, the CEO of Cyber|Decider said: “Businesses and their insurance brokers face a challenge from the wide variability of cyber insurance policies as to what they cover. In some areas the coverage provided by policies is similar and reasonably comprehensive, such as the costs from data breaches and forensic investigations, as well as meeting third party claims and any legal defence costs.
“But where ransomware causes a major interruption to the business, as it did with WannaCry, the coverage of insurance policies is highly variable. This coupled with the practice of many brokers of recommending only one policy means many businesses will not be covered for the business interruption costs from cyber attacks even though it is a high risk for them.”
“Similarly, whilst telephony fraud continues to hit many organisations of all sizes substantial losses, some insurers do not currently provide cover.”
Examples of problems organisations and their brokers currently face when dealing with cyber insurance policies:
- Policies often use different definitions and terms for the same thing, or include the same thing under different headings and sections – making policy comparison both time-consuming and laborious.
- Often policies use different definitions, right down to the most basic elements like “what is a computer”. For instance, some policies include industrial control systems in their definition and some don’t, a pretty vital distinction for many businesses!
- There is a high and surprising variability of what is covered between different policies. For instance, while most policies are pretty similar in their coverage of privacy issues, there is a lot of disparity around business interruption issues.
The WannaCry ransomware attack in May of this year was reported to have infected more than 230,000 computers in over 150 countries (Wikipedia), it was followed in June by the ransomware NotPetya, which also severely disrupted numerous large organisations internationally (Wikipedia).