Insurance against hacker attacks and errors in management

A new kind of insurance policies, which protect against some dangers, arouses more and more interest. We may insure a management board against responsibility for wrong decisions as well as the whole enterprise against consequences of hacker attacks.

The number of cyber-attacks increased by nearly 50 per cent in the world in 2014. According to report of PwC from December, it constitutes over 117 thousand of daily break-ins. The scale of this phenomenon is also increasing in a similar pace in Poland. The losses are considerable – the organization claims that the world economy may lose even 575 billion dollars because of it. We are observing more and more real damages and losses in public institutions and companies – admits Dominik Stachiewicz, member of the board in Donoria insurance broker. – We are also observing an increased hacker activity in the world. Moreover, we had some media situations last year in Poland. Therefore, we believe that insurances against such crimes will be purchased more eagerly in our country.

 

The increasing danger causes that the cyber insurances became popular in the West and in some cases they are considered as compulsory. Polish companies are also noticing the increasing potential dangers. It is a kind of insurance which protects in case of losing data by securing an institution which was exposed to it. The protection is provided independently on the fact if the loss was caused by an attack from the outside, a hacker one or it was caused be the result of actions within a partnership – informs Dominik Stachiewicz.

 

This kind of insurances is offered by only one company in Poland - AIG. It covers financial consequences of loss and illegal use of clients and employees' data, leak of commercial information and it also covers the costs of its recovery and reproduction within CyberEdge policy. Moreover, it deals with cases when criminals blackmail a company and demand a ransom by threating with disclosure of confidential information.

 

At present, insurers are very careful with a risk analysis. Certainly, a full information about the risk and the way of securing data is necessary – points out Stachiewicz. – The prices are low but there is no competition. We expect that they will be decreasing in the moment when offers proposed by other insurers will appear.   

 

The expert from Donoria assumes that cyber insurances show through the Polish market similarly to insurances against civil responsibility of members of the board and supervisory boards in partnerships. Such policies are more often bought by companies and not only by the biggest ones. The members of the boards of smaller and medium partnerships notice the need of purchase an insurance of this kind – emphasizes member of the board in Donoria. – The price of such policies has considerably decreased just like in case of other insurances, whereas the amount of insurers who offer this kind of insurance increased. We have a few players now who fight for clients not only with prices but also with conditions.

 

These polices are becoming more and more expensive. In some segments of partnerships, the claims against their authorities are noticeable in ca. 10 per cent of companies. The purchased policy secures only assets of members of the board, supervisory boards and companies. The insurers extended the spectrum of partnerships which may be included in this insurance. In the past it was not possible to insure a new partnership, that is a start-up. At present, it is not easy but possible to do. We may insure a company which is a start-up with a good business plan and which guarantees a stable development – says Stachiewicz.


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