So, you gonna foot this ‘$200bn’ hacking bill, insurance giants asked
Multibillion-dollar energy giants, rail companies and other corporations should take out insurance policies for damage caused by hackers, a White House official has suggested.
The government apparatchik is working on a so-called Cybersecurity Framework of best practices to safeguard America’s critical infrastructure – think power plants, water supplies and so on. The insurance policy plan was mooted among other suggestions on how best to defend important firms from electronic attacks.
The framework will be finalised by February 2014; adhering to its standards is voluntary, although it’s likely companies running vital services will be the first to sign up. And, obviously, it needs private insurance giants in the mix to offer indemnification against hackers.
Writing on the White House blog about the framework, Michael Daniel, special assistant to President Obama and a cyber-security coordinator, said: “The systems that run our nation’s critical infrastructure such as the electric grid, our drinking water, our trains, and other transportation are increasingly networked. As with any networked system, these systems are potentially vulnerable to a wide range of threats, and protecting this critical infrastructure from cyber threats is among our highest security priorities.”
The agencies involved in the discussions, which include the departments of Homeland Security, Commerce, and Treasury, were keen to get the insurance industry involved in the introduction of the framework, as they will be vital in soaking up losses caused by computer network breaches – the sorts of attacks that allegedly cost the UK up to £27bn a year and the US between $119bn and $188bn annually.
Daniel continued: “Agencies suggested that the insurance industry be engaged when developing the standards, procedures, and other measures that comprise the framework and the [voluntary] program. The goal of this collaboration would be to build underwriting practices that promote the adoption of cyber risk-reducing measures and risk-based pricing and foster a competitive cyber insurance market.”
Firms will not be forced to sign up to the new initiative, but the White House hopes by offering insurance and grants to industry, that companies will see the benefits of joining in with the scheme. ®