This is an interesting and very timely wake up call to all businesses and one that comes hard on the heels of issues being faced by the shipping industry as a result of the widely publicised ongoing cyber attack at Mearsk .
Complex supply chains such as those in the shipping industry depend on technology and when that is affected we can see the obvious scale and scope of issues arising.
We are already in a new age of risk and resilience has never been more important. Do we have insurance cover a client asked? Well no was the short answer. Data security and privacy covers look at issues with your own systems not someone elses. This is a business risk that might be picked up as part of a contract but typically not. What about business interruption – not an insured peril . It’s a financial loss. Supply chain insurance could be a solution as some insurers will assess supply chains and provide cover for non material damage losses such as business failure or a cyberattack .
Customers and brokers would do well to look more closely at contract wordings. Do you know how well a supplier or a customer manages its data security. Anticipate more contract scrutiny from people asking more about data security /IT infrastructure and evidence of cyber solutions in the event of a problem.
I fear that Lloyds are correct in this paper. Natural disasters are a plenty and cyber issues also will only add to the size of the insurance gap. Welcome to the real world evolving quickly !