Cyber Insurance

Table of Contents

Chapter 1:  Identifying Cyber Risk for Insurance	1
Debit & Credit Card Security Measures Cover Losses	2
Interest in Cyber Insurance Grows	3
Who is Vulnerable to Cyber Events?	4
Freezing New Credit to Prevent Fraud Losses	4
SIRF is Currently Uninsurable	6
News From the Insurance Information Institute	7
Cyber Crime Can Equate into Cyber Terrorism	10
Insurance & Definitions Regarding “Act of War”	11
Insuring Clouds for Data Storage	12
The Hope of a More Secure System	13
Banks Must Act to Prevent Losses	14
Even Chip-and-PIN Cards Facing Fraud & Loss	14
Insurance Industry’s Cyber Reports	15
Chapter 2:  Growth of Cyber Risk	16
The question is: how did we get to this point?	16
Chart 1969-1988	17
Chart 1994-2003	18
Chart 2003-2007	19
Chart 2008-2010	20
Chart 2010-2011	21
Chart 2012-2013	22
Chart 2013-2014	23
Chart 2015	24
The Future of Cyber Security Risks & Coverages	26
Botnet	27
Determining Who Needs Coverage	28
Cyber Forensics	28
Hacktivists	29
Insurance Considers Current Risks	29
Even Insurers Experience Risk	30
We are a Connected World	31
Effective Risk Management Includes Insurance	31
Risk Management is Ongoing	32
Shadow IT	34
Industry Best Practices	36
Insurers May Require Vetting of Third-Party Vendors	36
Insurers Want Analytical Data, so Keep Track	37
Working with Insurers	38
Insurance Market Exists in Cyber Coverage	38
Overlapping Coverage Issues	39
War & Terrorism Policy Exclusion	40
Chapter 3:  Cyber Insurance Policy Provisions	43
Defining Cyber War & Terrorism, Separate from Non-Cyber Events	43
Types of Liability Policies	44
Manifestation Theory	45
Triple Trigger Theory	45
Available third party coverages	46
The Policy	47
Cyber Security Liability Coverage Form	48
I. INSURING AGREEMENTS	48
II. COVERED CAUSES OF LOSS	50
III. DEFINITIONS	51
IV. EXCLUSIONS	57
V. YOU AND YOUR ORGANIZATION	59
VI. TERRITORY	59
VII. POLICY TERMS AND CONDITIONS	59
Chapter 4:  Cyber Risk Management	67
Terrorism Risk Insurance Program Reauthorization Act	67
Personal Privacy	68
Recommendations for Placing Cyber Insurance	68
The Challenge of Risk Management	71
Cloud Vendors, Data Storage, & Cyber Policies	73
The Legal Side of Cyber Breaches	76
Commercial Policies vs. Cyber Liability Policies	78
NAIC Principles for Effective Cybersecurity: Insurance Regulatory Guidance	80
Data Security & Breach Notification Act of 2015	83
Cyber Security Bill of Rights	84
Cybersecurity Bill of Rights for Insurance Consumers	85
Chapter 5:  Emerging Future of Cyber Risks	87
The Future Challenges Insurers	88
Security Intelligence	89
Altered Data	92
The Changing Face of Crime Means New Insuring Requirements	92
Brick Attacks	94
Biometric Security	94
Genetic Testing	94
Smart Meters	95
Distance Crime Changes Insurance Picture	95
Project 2020	95
Cyber Crime Insurance Risk	98
Risk-Based & Control-Based Insurance Models	98
Types of Cyber Criminal Threats	99
When Cyber Crime Evolves into Potentially Insured Physical Threats	99
Creation of Intelligent Computers	100
Multiple Identities	100
The Insurer’s Role	101
CIO’s consider the following	102

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