Do you need Cyber Insurance?

So, here’s an interesting thought.   What do the pandemic and the Russian attack on Ukraine have in common, and how could that impact you/us?   I’ll bet you never wondered about that question but I have been thinking about it and would like to share a few thoughts with you.

Working from Home

Since the pandemic, many of us have changed the way we work.   Lots of us have had the ability to work from home, which means there has been a need to install software to allow us to “remote in” over the internet to the office server.   Some of us no longer go the bank as often as we did pre-pandemic and now do more and more digital banking.  We even do banking while on the move from our cell phones.    We have also changed some of our shopping routines, buying more items over the internet, sending our credit card numbers out over the internet.    I don’t know about you but my inbox has become inundated with e-mails from a range of marketing firms and vendors, and I wonder how they even got my e-mail address in the first place.   Do I open them?  Not usually.  Could there be malware attached to those unsolicited e-mails? 

Cyber Hackers

I don’t know how much of what we read is true about Russia hacking into various cyber sites around the worlds, but I’d bet my eye teeth that it is happening.   And I don’t know how many “independent” operators are using drone equipment to let the Ukrainian army know the precise GPS co-ordinates of the advancing Russian military.   I’ve heard that people, much more technically advanced than I, are hacking into the Russian General’s cell phones to learn of their GPS locations.  

1,000% Premium Increase!!

What I do know is that, here at the office, our quoted premium for cyber insurance increased 1000% since last year.   Yes, that’s NOT a typographical error.   1000%!   Really!!   Why?   

Insurance companies are apparently saying that the Russian government uses malware as part of its strategy in its war against Ukraine.  They are also saying that more and more companies and individuals are being targeted through e-mails and banking systems.  These are regular people like you and me.  It is reported that claims are being paid at rates 1.5 times higher than insurers are receiving premiums (which might explain the huge difference in our quoted premium).   Because of this, insurers are now looking to deny claims, based on an “act of war” exclusion in many policies.  Is a cyber-attack a “hostile” or “warlike” act?   Does a government have to be involved in order for it to be considered an act of war?     Will you be covered should you be subject to a cyber attack or asked to pay ransom after a malware attack.? 

Read the Fine Print

I don’t pretend to know the answer to these questions.  I do know that it will depend on the wording contained in each policy and it will depend on the facts of each case.   This is a developing area of the law.  This article isn’t intended to promote cyber insurance policies.  But I also know that you should take all reasonable steps to protect your personal information so that you don’t, or your business doesn’t, suffer these types of losses.   What I also know with certainty is that the lawyers at Velocity Injury Law LLP fight insurance companies every day.   We know how tricky it can be and what tactics insurance companies use in their efforts to deny claims.   

If you need us, call us.   Even if it’s just to ask a question.