A new report from Symantec Corp., a leading security firm, highlights the dangers of cyber attacks and the value of cyber insurance. Late last month, approximately 48 chemical and defense companies in the U.S. were the targets of a large cyber attack that was traced back to one man in China. Symantec did not identify the companies in the report, but noted that few had any kind of insurance to protect against such an attack. The attack has been linked to industrial espionage, as the compromised information detailed chemicals, formulas and manufacturing processes used in military and industrial ventures.
Cyber insurance is most often associated with companies that have consumer data on file. Attacks against these companies could compromise the financial information of consumers, putting the company at risk of costly lawsuits. Insurance policies that protect against cyber attacks, however, can cover the myriad of costs associated with recovery and legal actions. For the companies targeted by the recent attack, insurance would help offset the costs of coordinating multinational efforts to catch the man responsible. Insurance would also help cover the cost of building more proficient security measures to deter future hackers.
With technology playing a larger role in business and government operations, the need for cyber insurance is becoming alarmingly apparent. As hackers grow more tenacious and sophisticated in their attacks, insurance may soon become the first line of defense against malicious intent.