Russian cyberattacks could cost insurers billions, industry experts warn
Insurers could be forced to pay out billions to those impacted by cyberattacks following Russia’s invasion of Ukraine.
Ambiguous wording in cyber insurance policies could see insurance companies made liable to pay out billions to victims of hacking
Insurers may be forced to cover the costs imposed on businesses of paying for ransoms and repairing hacked networks.
Just a single large-scale cyberattack could lead to claims worth more than $20bn (£15bn), insurance insiders have warned.
Experts have warned that war exclusions will not prevent insurers from paying out, after a US judge said Ace American must pay out $1.4bn to Merck & Co after it was attacked by Russian hackers in 2017.
The warnings come after the UK’s Financial Conduct Authority (FCA) last month told British companies to strengthen their cybersecurity systems, following Russia’s invasion of Ukraine.
The watchdog’s call for companies to boost cybersecurity measures came after UK Digital Minister Chris Philp said there is a “heightened threat of cyberattack” due to the Ukraine war.
Last month, US president Joe Biden also said Americans have a “patriotic duty” to boost their cyber defenses, as he claimed there is “evolving intelligence” that “Russia may be planning a cyberattack” against the United States.
Cyberattacks have already been launched against Ukraine targeting banks, telecoms, government infrastructure and critical services.