Lloyd's of London insures against hacking
Get whacked, get a cheque
Computer security outfit Counterpane Security has begun offering coverage against losses due to malicious hacking, which will be underwritten in part by insurance powerhouse Lloyd's of London.
Counterpane claims to be the first to guarantee direct reimbursement if an intruder should make a pudding of its defences. The guarantee is underwritten by brokers Frank Crystal and SafeOnline, offering $1 million in coverage for an annual premium of $20,000, and $10 million in coverage for $75,000. Additional coverage of up to $100 million will be available through direct negotiation with Lloyd's.
Counterpane will compensate for the loss of, or damage to, information assets (e.g., data, customer lists, credit card numbers, budgets, proposals, work papers, or any other digital information) resulting from a breach of security or technology failure. The insurance also covers business interruption due to loss of use resulting from a breach of security, the company says.
"This insurance protection allows our clients, and their customers, to differentiate themselves in their business by offering the highest level of security assurance to their customers. Participating companies will have taken every reasonable step to close the window of exposure for their businesses," Counterpane CEO Tom Rowley chirped.
An endless series of reports funded by security product and service vendors, and encouraged by the FBI and other alarmist law-enforcement bodies, continue to show a rapidly-increasing and potentially devastating threat to all of Western Civilisation from malicious hackers.
Because losses to malicious on-line activity are impossible to estimate accurately (those resulting from the Love Bug's devastation range from a few hundred million to $12 billion), it is difficult to say whether a heroic investment in security services and insurance might or might not be penny wise and pound foolish; though at some point, we suspect, the cost of protection could well exceed the cost of whatever damage might possibly be done.
Still, it's not how much you lose, but whom you lose it to, that often matters in the Big Picture. Shareholders do seem a bit more confident when their company officers lose money deliberately, as when 'investing' in security schemes, rather than accidentally, as when whacked by fifteen-year-old kids, so from the perspective of investor confidence, at least, this all just might make sense. ®
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