07
Oct
2016

Securing Coverage for Cyberattacks

Risk Management Magazine

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PUBLISHED ON: October 7, 2016

Recent high-profile cyberattacks have demonstrated that hackers do not always intend to steal. Instead, many hacks are designed to disrupt normal business operations and damage computer systems or even brick-and-mortar property.

The reasons for this trend are varied. Some cybercriminals target computer systems to further espionage, extortion, political or “moral” causes. Some of these hacks are merely incidental to technological trends in the internet of things arena that have increased connectivity of a wide range of products and systems. In this new environment, then, risk managers need to closely consider their first-party coverage for losses of business income and damage to reputation.

Companies are vulnerable to a variety of potential cyber events that can trigger coverage. Ransomware can hold entire networks hostage until the targeted policyholder pays the extortion fee. Hidden malware in apps for smart devices can result in data breaches. Indeed, there seems to be an almost unlimited set of tools that hackers can use to steal, impair or destroy information in the cyber world that can result in physical damage and tangible economic impact to a company in both the short- and long-term.