Insurers leave IT in lurch
© 2002 ComputerWeekly.com Ltd. All rights reserved
IT and financial directors should check their insurance policies to ensure
their data is protected according to security architecture and risk management
Tuesday, 19th February 2002 - In the aftermath of last year's 11 September
terrorist attacks, many global corporate insurance providers have rewritten
their terms and conditions to specifically exclude cover for data and digital
liabilities, according to mi2g chief executive DK Matai.
"WTC created massive data traffic losses for
business interruption insurers. A modern corporate runs the risk of trading
without having effective business interruption or disaster cover in place,"
explained Steve Reynolds, commercial insurance partner at law firm Hammond
Suddards Edge. "Shareholders will not accept that
risk; neither should the board."
The growing threat of viruses and hacker attacks has given added urgency
to the insurance companies desire to drop data cover - and makes the issue
even more important for IT directors.
David Ovenden, chairman of the Digital Risk Working Party and Royal & Sun
Alliance Group Underwriting and Claims department, warned that most insurance
companie's will claim that "cyber cover" was
never intended under the policy.
"When these policies were originally issued,
data was not part of physical property, and viruses and hacking were not issues,"
mi2g believes these changes will result in a surge of business for
specialist digital risk insurance companies.