Despite Rising “Cyber Crime” Threat Available Coverage Often Ignored

January 23, 2006

While most companies are well aware of the threats “cyber crime” poses to their computer systemsand data bases, many of them remain unaware of the availability of coverage to help deal with the damages caused by attacks after they’ve occurred.

That’s the conclusion reached by a survey, published on the Lloyd’s Website (www.lloyd’ According to the survey: “Sixty four per cent of US companies have suffered a financial loss due to cyber crime, and almost half of the thefts were committed by an insider.” New research, conducted by the Federal Bureau of Investigation, who polled some 24,000 users in countries around the world, concluded that viruses and worms have caused the biggest damage leading to losses of around $32 million.

Lloyd’s notes that it “provides policies to protect businesses from cyber crime, but underwriters are concerned that many firms are unaware they exist. Marcus Breese, U.K. Manager – Hiscox Technology, noted: “Companies spend a great deal of money on the technology to protect themselves from such attacks. But the majority are unaware of the fact that there are policies out there which are designed to cover some of the risks companies face.”

Paul Skinner, Senior ICT Underwriter with Chubb, and Chairman of the IUA’s Digital Risks Committee added: “The research is not a surprise to those who are aware of the growing issues that companies face. The question companies have to ask themselves is not if this happens to them, but when this happens to them how much will it cost, both to rectify and in terms of lost business.”

Another surprising finding from the FBI revealed that only 9 percent of firms reported “cyber crime” incidents to the police, “as most of them believed that there was little the authorities could do.”

Frank Abagnale, spokesman for the National Cyber Security Alliance and subject of Steven Spielberg’s hit film “Catch Me If You Can,” stated: “The threat of confidential information being stolen by an employee or an outsider is no longer a question of ‘if’ but ‘when’.” He added that those who ignore the results of the FBI’s survey do so “at their own peril.”

Daniel Larkin, FBI Unit chief for the Internet Crime Compliant Center (ICCC), added that there now needed to be greater cooperation between the public and private sectors in an effort to stem this rising tide of cyber crime.

“Lloyd’s and the London market are leading the industry’s response to cyber crime, with specialist insurers now offering a range of products to protect clients from losses arising from a cyber attack,” said the bulletin. “The type of coverage available varies from the very general to quite specific depending on a company’s requirements and could include aspects such as damage to data or systems, business interruption, extortion and defamation. However there remains a great deal of ignorance amongst firms that these new risks can be covered.”

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