Got cyber insurance?

[InfoSec News <alerts () infosecnews org>]

http://www.networkworld.com/news/2011/102411-cyber-insurance-252145.html

By Lamont Wood
Network World
October 24, 2011

Heartland Payment Systems figured it was in pretty good shape when it 
took out a $30 million cyber insurance policy. Unfortunately, the credit 
card transaction processor was the victim of a massive data breach in 
early 2009 that resulted in losses estimated at $145 million. The 
insurance company did pay Heartland the $30 million, but the company was 
on the hook for the remaining $115 million.

So, is cyber insurance worth it? Is it right for your company? What type 
of coverage should you get? How much is enough? And what are the gotchas 
to watch out for?

The first point to understand is that standard business insurance does 
not cover data breaches or almost any other loss involving data. 
Standard insurance covers tangible losses and damage. Data isn't 
tangible.

For that distinction you can thank American Guarantee & Liability 
Insurance Co. vs. Ingram Micro Inc., a U.S. District Court ruling in 
Arizona in 2000. The court said that a computer outage caused by a power 
problem constituted physical damage within the meaning of the policy 
Ingram Micro had purchased from American Guarantee.

[...]


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