“Information that companies store digitally is vulnerable to data breaches by both malicious hackers and careless employees. The costs associated with these breaches can be staggering,” writes Michael T. Glascott of Goldberg Segalla’s Global Insurance Services and Cyber Risk and Social Media Practice Groups with co-author Aaron J. Aisen.
“Insurers responded to this new risk by offering cyber insurance products that specifically cover the risk of loss from data breaches and other cyber attacks. … Many insurers entered the new cyber insurance market without conducting a systemic evaluation of the unique risk posed by each insured.”
In this article, Mike and Aaron examine the growing threat of cyber attacks, the importance of cyber security, the purpose of cyber insurance, and the risks it covers. It contains a thorough discussion of the market for cyber insurance including its growth, supply and demand features, and problem areas. It also examines the more developed European market for cyber insurance, analyzes case law regarding how U.S. courts have dealt with the issue of whether cyber claims are covered by traditional forms of insurance, and offers recommendations regarding pricing and buying cyber insurance policies and integrating them into a comprehensive plan for managing cyber attack risks.