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Daily Insurance Industry News
Saturday 21st of October 2017
March 19, 2012

Directors must wake up to cyber threats

by Gill Montia

Story link: Directors must wake up to cyber threats

Company directors must wake up to cyber threats or risk litigation from all sides, Willis has warned.

Speaking at a recent cyber liability conference in London, the broker’s FINEX global unit director, Francis Kean, urged boards to grasp how exposed their company is to the digital threat environment, following recent Securities and Exchange Commission (SEC) guidance on disclosure of cyber attacks.

The SEC guidance was issued last year in response to concerns that it is difficult for investors to assess security risks if companies fail to disclose data breaches in their public filings.

There are five specific disclosure areas addressed in the guidance: pre-attack exposure analysis; cyber incidents; exposure to the firm in description of business; legal proceedings; and financial statement implication.

According to Mr Kean, directors’ fiduciary duties now require them to gain some understanding of the cyber threat faced by their companies and to ensure adequate and proportionate procedures are adopted to mitigate the consequences of a serious data breach.

Willis’ cyber liabilities practice leader, Jeremy Smith, believes that advanced persistent threats (APTs), such as the Aurora virus and Nightdragon, are the next challenge for the insurance industry.

He explains: “APTs are sustained attacks designed to steal intellectual property over a number of years.

“The insurance industry hasn’t fully tackled this threat yet, but I hope that brokers and insurers will find a solution together in the future.”

Mr Smith also suggests that companies with large exposures should consider a stand-alone product, as cyber liability has developed into a specialist market with expert underwriters and tailored products.

 

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