Bayshore Blog Post: Financial Times report
February 23, 2015
FT: $1B in Cyber Insurance Coverage Required
Gina Chon of the Financial Times, with Alistair Gray, reports that industry experts are warning that companies will need as much as $1B in cyber insurance coverage as the costs of hacking attacks mount. But some groups are struggling to secure a tenth of that.
The maximum amount of cyber insurance currently available is $500M, although most companies have difficulty obtaining more than about $300m in coverage. That means they could face hundreds of millions of dollars in extra costs if their networks are hacked.
The scale of the threat was highlighted this week when researchers at Kaspersky Labs, a Russian cyber security group, said they had uncovered sophisticated spying software in the hard drives of personal computers used in 30 countries, including Iran, Pakistan, Russia and China. The costs of cyber attacks are rocketing.
US retailer Target said in November that the cost for the data breach that affected up to 110m of its customers had reached $248M.
But costs would be even higher in the event of a catastrophic hit on a large bank or a power utility. That kind of threat has prompted the US government and the private sector to work together to find ways to boost coverage.