Commenting on the Abta cyber incident, Sarah Stephens, Head of Cyber at JLT Specialty, said:“In an age of IT outsourcing, where information is stored on a server or through a third party vendor, as we have seen in the case of Abta, companies are at greater risk of experiencing a data loss or cyber incident on a large scale.
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“The raft of additional expenses following a data breach, most notably for consumer or member notification, forensic investigation, public relations, and other crisis management expenses, highlight the need for cyber insurance. Traditional insurance products aren't likely to respond to the potentially significant incident response costs in this case, which may extend far beyond Abta itself. A critical element of cover in cyber policies is the policy responding to the insured’s costs and liability even if a vendor, such as a third party web developer and hosting company, is the source of the security breach or technology failure. Due to incidents like this, scrutiny of third party contractors’ cyber security systems have increased and many companies have tightened the level of required controls.
“In reality, these cyber-attacks will continue and we’re going to see more hacks in increasing volume and severity. Companies can no longer view cyber insurance as merely optional, but rather a critical weapon in their cyber risk management arsenal.”
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