American International Group (AIG) is thought to be the first company in the world to offer cyber insurance cover that includes damage to commercial property. In a unique move, the global insurer has also expanded its protection to compensate for security failures and physical injury to staff posed by cyber-attacks.
Targeted at business customers, CyberEdge PC has been designed specifically to counter the rising number of incidents and internet breeches aimed directly at commercial industries. One recent report claimed that every web-connected business in America would suffer a cyber-attack sometime during its existence — with equipment failure, damage to property, and staff injuries heading the list of potential consequences.
“Cyber risk goes well beyond data privacy concerns covered by the more common stand-alone cyber insurance policies,” said Tracie Grella, global head of professional liability at AIG. The extended coverage comes, she says, in response to increased concern that a cyber-attack could cause injury or damage to property by disabling medical equipment or energy infrastructure.
“The physical risk of a cyber-attack or cyber event to property and people is very real, and it can now be specifically and unambiguously addressed with expanded cyber insurance coverage that dovetails with existing insurance,” Grella adds.
By delivering cyber event protection on an excess and difference-in-conditions basis, CyberEdge PC can also improve a customer’s existing commercial insurance programme, says AIG. It also claims that its new policy provides wide coverage limits and terms typically not available in stand-alone cyber data breach policies.
The policy also addresses coverage gaps in property, casualty, energy, aerospace, marine, environmental, healthcare, and financial lines policies, where cyber-related exposures may be excluded or coverage too limited.
“As the leading provider of network security and cyber-risk insurance, we are continually re-examining its product set to meet the new risks and challenges of today’s business environment,” explained Ty R Sagalow, executive vice-president and chief operating officer at the New York-based insurer.
“Traditional policies generally do not cover data and information systems from security threats, leaving businesses more vulnerable and in considerable need of protection from network risk,” he added.
CyberEdge PC is an extension of AIG’s CyberEdge product line, which has been providing stand-alone insurance coverage since 1999 and has previously been restricted to helping its clients cope with data breaches by covering costs of forensic investigations, credit monitoring, reputation management, business interruption, and compliance with state breach notification laws.
The new policy cover was adapted to fit standards established by America’s National Institute of Standards and Technology, which direct companies to follow certain risk management strategies in order to prevent information from becoming compromised in the event of a cyber-attack.
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