Utilities in the United States may need insurance coverage to protect against digital threats
Utilities in the United States are beginning to express concern over digital risks following cyber attacks that were seen in Ukraine in December 2015. As such, these companies are beginning to look into new cyber insurance policies, which may be able to offer them a degree of protection against digital threats. Malicious groups could do significant damage to a country’s energy infrastructure through a cyber attack and utilities are looking for ways to ensure that this damage can be mitigated in an effective manner.
Hackers cause significant damage in Ukraine in December
In December of last year, hackers attacked Ukraine’s energy infrastructure, leaving some 80,000 people without electrical power. The attack had a major financial impact on the country, which it is still struggling to overcome. A similar attack targeting the United States could leave utilities crippled, causing some $200 billion in economic damage. Cyber insurance may not be the best form of protection against these attacks, but it could provide utilities with a financial safety net in the event of a digital attack.
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Cyber insurance could provide utilities with the protection they need
Cyber insurance policies usually cover the cost associated with digital attacks that result in the theft of sensitive information and the personal data of consumers. Some property and liability policies also provide coverage for the physical damage that can be done in a cyber attack. The insurance industry has had a history of being somewhat ambiguous when it comes to providing a clear definition of what cyber insurance protects against and insurers may soon feel pressured to make these definitions more clear in the coming years, especially as malicious attacks begin to target utilities.
Security experts continue to encourage the adoption of cyber protection
Security experts have long warned of the threats that utilities face, encouraging them to acquire adequate insurance coverage and protect themselves accordingly. Following the cyber attack in Ukraine, utilities are beginning to see the value of cyber insurance coverage. Some are beginning to weigh the value of this coverage and determine whether or not they should acquire policies in the near future.