Cybercrime is “one of the greatest perils facing modern society”, a senior insurance lawyer has warned.
The crime figures for England and Wales soared last week due to the inclusion for the first time of cybercrime. The crime rate doubled to more than 11.6m offences, with an estimated 5.1m online fraud incidents and 2.5m cybercrime offences. The crime survey is based on people’s experiences of crime.
Typical offences include phishing, identity theft and online fraud, but what insurance is available, and what risks exist for insurers?
Kieran Jones, head of the insurance and reinsurance team at Weightmans, says: “While the insurance industry is working hard to develop new products and covers to meet demand, take up is perhaps not as great notwithstanding much publicised cyber incidents. One of the reasons may be because policy holders believe they are covered under existing policies to include, for example, public and professional indemnity policies.
“Such beliefs need careful consideration and if a ‘cyber’ policy is to be taken out then it is essential that it meets the policy holder requirements be they for third or first party cover or both. For the insurer/reinsurer community there are many challenges in a developing market where there is little if any data upon which to model for the future.
“One issue in particular may keep insurance industry professionals awake at night, being the potential for aggregation of risk whereby depending upon the nature of the cyber incident the insurer may be involved for a multitude of insureds via different lines.”
