Insurance Industry News

Cyber insurance protection availability growing

A rising number of insurers, now including AIG, are offering this coverage as businesses boost their demand.

data overload cyber insuranceAt a time in which the headlines involving businesses that have undergone data breaches and other digital attacks are becoming a regular occurrence, American International Group (AIG) has now announced that it will be joining the growing number of insurers that are offering cyber insurance protection.

This policy from AIG will be providing coverage to businesses against illegal hacking.

The cyber insurance policy will not, in this case, provide any protection against physical damage that could occur as a result of a digital attack or a hacking incident. Instead, this particular product is being marketed as an option that is available in addition to the data security coverage that the company had already been selling.

This new cyber insurance policy will add a new level of protection over what they had already offered.

The insurer explained that the new form of policy will provide companies with coverage against claims that come about from property damage and personal injury situations that were caused by a cyber attack. An executive from AIG pointed out that some of the viruses that currently exist can lead to damage to industrial control systems if they are able to make their way in. She also stated that the number of ways in which cyber attacks can be launched in order to result in property damage are innumerous.

Though the majority of these breaches are conducted in order to achieve data theft – which is a particularly rapidly growing trend when considering the number of “smart” devices and appliances that are connected to the internet – there is also a notable rise being observed in the risk to connected devices and infrastructures that could bring about damage to property and situations of personal injury.

The Financial Times reported that this new cyber insurance from AIG represents the first time that this type of digital coverage has extended out to cover physical damage, when offered by a major insurer. It will now be up to businesses to decide whether or not they feel that their exposure is great enough to make this product worthwhile.