A coordinated global cyber attack could cause economic damage anywhere between $85 billion and $193 billion.
Britain’s retail and commercial banking giant Lloyds Bank Plc stated, all insurance and reinsurance policies should clearly state whether they will cover losses caused by a cyber attack; this would be in the best interest of customers and brokers.
Lloyd’s, which has products for the insurance market which covers risks ranging from oil rigs to soccer stars’ legs, made it lucidly cleat that all policies must provide clarity on cyber insurance by either excluding or definitely providing cover.
Lloyd’s action comes in the wake of Britain’s financial watchdog the Prudential Regulation Authority, writing to insurers in the beginning of this year saying they should have plans to reduce the unintended exposure which could be caused by unclear cyber cover.
According to a stress test done earlier this year, a coordinated global cyber attack could cause economic damage anywhere between $85 billion and $193 billion.
In 2017, cyber attacks had wreaked economic damage across the globe crippling thousands of computers and disrupting ports from Mumbai to Los Angeles.
Governments have repeatedly warned about the risks private businesses face from such attacks, both those carried out by foreign governments and financially motivated criminals.
Lloyd’s stated, its underwriters should ensure that all policies starting in 2020 for first-party property damage should make the status of cyber cover clear.
For liability and treaty reinsurance the requirements will come into effect in two phases during 2020 and 2021, said Lloyd’s, which began life in Edward Lloyd’s coffee house in 1688.