Why cyber business interruption is a bigger threat than GDPR
In this IIL accident lecture Ben Hobby considered the impact of cyber business interruption on corporations and the challenges this raises for insurers.
The increasing number of data breaches that are occurring mean that cyber insurers have gained significant experience in how to handle a loss of this nature. However, given the lack of claims experience, business interruption resulting from a cyber event is less well understood by the insurance market.
Corporates are also focusing their resources on managing and mitigating the risk created by the external hacker threat. However, in doing so, the risks and potential loss magnitude caused by system failure is less well understood, meaning that buyers either don't have insurance cover at all, or don't have the right cover.
Consideration therefore needs to be given to IT infrastructure, how it is set up, managed and updated, as well as the flows of data that occur within this infrastructure. In addition, analyses need to be prepared that address what will happen in the vent of system failure, as well as what the appropriate disaster recovery plan should include.
By the end of this lecture members should have gained an insight into:
- Why cyber business interruption is a business critical risk
- How the cyber business interruption risk can be identified and analysed
- The importance for both corporates and insurers of fully understanding the cyber business interruption risk
For more than a decade, Ben Hobby has handled business interruption losses and investigations of various scopes and sizes for insurers, lawyers and corporates across the globe. In recent years, he has handled some of the largest cyber business interruption losses that have been managed by the London market.
Hans Allnutt, Partner, DAC Beachcroft LLP.
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