Cyber Crime and Cyber Terrorism

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CHAPTER 16
The rise of cyber liability insurance
Whilst it must be recognized that the cyber threat can come from an external 
source businesses are in need to be reminded that they are far more likely to be the 
victims of a cyber-related incident from within their own organization than that of an 
external source. Many organizations are already taking steps to protect themselves 
and their businesses from the cyber threat with Firewall technology, Antivirus pro-
tection and Intrusion Detection Systems. However internally, their processes have 
not evolved to protect themselves and the information they hold at the same pace. 
The incidents relayed earlier demonstrate that having good security controls in place 
will not prevent someone “misplacing” backup files containing masses of informa-
tion. Nor will it prevent staff from throwing away physical documentation which 
contains personal information in the trash. The cyber threat therefore is far from 
being purely related to online information, a matter which the regulatory framework, 
worldwide is trying to address.
A CHANGING REGULATORY LANDSCAPE
Increased scrutiny by regulatory bodies (worldwide) and threats of increased fines 
have clearly raised the need for appropriate protection. In Europe, January 2012 the 
European Commission proposed a reform of the EU’s 1995 data protection rules in 
a bid to strengthen online privacy rights. This was seen as a key requirement due in 
part because the 27 EU Member States had implemented the 1995 rules differently, 
resulting in divergences in enforcement. The intention is to create a single law which 
will reduce the cost of administration (of the legal frameworks) and is seen as a way 
to raise confidence in online services (see Chapters 1 and 14).
This chapter is not intended to be an in-depth review of the new regulation but 
there are key elements of the standard which are worthy of exploration as they di-
rectly impact the growing need for CL Insurance.