A bipartisan cybersecurity bill may be heading for Congress this week. Federal lawmakers have been discussing the growing threat residing in the digital world and what it means for national security and that of citizens. Over the years, several companies have been the target of cybercrimes such as hacking and data theft. The recent security breaches at Sony Online Entertainment, which compromised the financial information of thousands of consumers, highlight the need for new legislations that encourage cyber insurance.
Cyber insurance – that is, insurance that protects against cybercrime – is relatively rare in the U.S. The scarcity of such coverage is due, in part, to the vague nature of the Internet itself. Insurers have been unable to write policies that accommodate for all risks inherent in the Internet as most of them are ill-defined, while others cannot be defined at all. Federal legislators are now looking to draft regulations concerning cyber insurance that will allow insurers to identify and manage risk.
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Earlier in the month, a Republican task force outlined the importance of cybersecurity for the nation. Legislators on both sides of the party line have so far agreed that security is a top priority and that insurance is an adequate defense against crime. How this consensus will play out is yet to be seen, but the cyber insurance industry is likely to benefit from new legislations that may come in the months ahead.