Would you hire a lawyer who thinks cybercrime is an Act of God?

Would you hire a lawyer who thinks cybercrime is an Act of God?

in CARM / by admin

June 2, 2014 With cybercrime insurance, insurance companies charge money to cover the risk of cybercrime exposure and underwrite any losses up to an agreed level. In practice, there’s lots of legal ‘small print’ to navigate detailing the many exemptions and get-out clauses. Your car insurance is invalidated if you leave your doors unlocked, so it makes sense that your cybercrime insurance won’t cover you if you don’t have your security systems running properly.
Cybercrime is increasingly referred to in legal documentation. Most people will recognise force majeure (Act of God) from the small print of their airline ticket; the part where it says you can’t claim a refund in the event of your plane being sucked into a tornado or hit by an asteroid. Unbelievably, this common contract clause is also included in many legal documents in relation to cyber security.
I have a lot of respect for people’s religious beliefs, but – I’m sorry – you are crazy if you think that it’s the Almighty hammering out code to exploit the cyber security weaknesses of target organisations.
Providers of IT services have legitimate claims to use the force majeure exemption when it applies to their datacentre being flooded or demolished by an earthquake. However, I don’t think these protections against corporate risk should be used as a get-out clause when hackers, viruses and security breaches strike!!
The opportunities for good cybercrime insurance are long overdue, especially if they stay away from defining cybercriminal activity in the same way as a bolt of lightning.
The earliest business insurance related to ships and their cargo. A ship container full of plasma TVs undoubtedly has its contents insured. Consider for a moment just how much vital data cargo is being held and transported everyday between organisations. Shouldn’t this be insured too?
Having car insurance doesn’t stop you trying to avoid accidents. In fact, it stops working when you stop trying! Cybercrime insurance policies could be a great idea for business to adopt, but it won’t stay in force if you fail to keep your cybercrime protection updated.