This case below illustrates potential aggregation of cyber risk regarding third party service providers and which insurers fear the most due to the potential amount of claims.
On the 21st October 2016 a distributed denial of service (DDoS) attack took down many of the world’s most popular sites including Twitter, Spotify, Netflix and more. This lasted several hours leaving many insurers asking how this would affect their customers businesses.
The hackers send junk requests to Dyn, a leading USA domain name system (DNS) manager, overwhelming its system, preventing consumers from connecting to these sites. There was a third attack but Dyn were able to prevent this.
Cyber criminals are aware of the proliferation of internet devices and took advantage to execute a large scale attack over several hours.
There has been an impact from this event to the Cyber Insurance industry with estimates of the attack causing $110 million in total Business Interruption losses. Some insurers have advised that the Cyber Liability insurance policy excesses may be higher than the amount of downtime experience, however, it does serve as a reminder for the importance to manage the policyholder’s Cyber Insurance limit.
For more information on Cyber Liability insurance, please do not hesitate to contact ourselves.
To learn more about cyber crime visit our Cyber and Financial Crime page.