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In the aftermath of last year's 11 September terrorist attacks, many global corporate insurance providers have rewritten their terms and conditions to specifically exclude cover for data and digital liabilities, according to mi2g chief executive DK Matai.
"WTC created massive data traffic losses for business interruption insurers. A modern corporate runs the risk of trading without having effective business interruption or disaster cover in place," explained Steve Reynolds, commercial insurance partner at law firm Hammond Suddards Edge. "Shareholders will not accept that risk; neither should the board."
The growing threat of viruses and hacker attacks has given added urgency to the insurance companies desire to drop data cover - and makes the issue even more important for IT directors.
David Ovenden, chairman of the Digital Risk Working Party and Royal & Sun Alliance Group Underwriting and Claims department, warned that most insurance companies will claim that "cyber cover" was never intended under the policy.
"When these policies were originally issued, data was not part of physical property, and viruses and hacking were not issues," Ovenden said.
Mi2g believes these changes will result in a surge of business for specialist digital risk insurance companies.