Scams can already be done online in today’s generation. A lot of hackers and computer specialists exist and are continuously growing in number that the Federal Bureau of Investigation has already deployed a department specifically for this field of fraudulent acts. Computer tactics has already been included in the curriculum of criminology classes.
The biggest sector involved in cyber hacking are private companies and government institutions. Companies that have suffered a data breach look to their insurance policies for coverage to help mitigate some of the enormous costs. The application of standard form commercial general liability (CGL) policies to data breach incidents has led to various legal actions and differing opinions.
Insurance companies like Axis Capital, with a group of insurance and reinsurance companies all from its main branch in Bermuda, Singapore, Australia, Europe and on more than 10 states in United States of America has also developed their system to meet the demands on cyber insurance.
Hackers are traced back to developing cities like Beijing, China, Jakarta, Indonesia and Bangkok, Thailand. Illegal acts are being done in internet cafes, a good public place from which the IP address is not traceable.
Cyber Security and Insurance
While traditional insurance policies typically have not handled these emerging risks, limited coverage under traditional policies may be available. For example, in general there would be coverage under a traditional property insurance policy if a cyber-incident resulted in a covered cause of loss such as a fire that caused property damage.
Traditional property insurance policies often contain express provisions covering damage or disruption to electronic data. The package policy known as the Business Owners Policy (BOP) that is often purchased by medium and smaller-sized businesses includes coverage for electronic data loss.
This means that in the event electronic data is destroyed or damaged as the result of a covered cause of loss, the insurer will pay the cost to replace or restore it. Causes of loss that apply to this coverage include a computer virus, harmful code or other harmful instructions entered into a computer system or network to which it is connected. There is no coverage, however, for loss or damage caused by the actions of any employee.
Reliance on traditional insurance policies is not enough, however, so specialized cyber insurance policies have been developed by insurers to help businesses and individuals protect themselves from an ever-evolving range of risks. Recent market intelligence suggests that the types of specialized cyber coverage being offered by insurers are expanding in response to this fast-growing market need.
Specialized cyber risk coverage is available primarily as a stand-alone policy. Each policy is tailored to the specific needs of a company, depending on the technology being used and the level of risk involved. Both first- and third-party coverage is available.