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Cyber risk, protecting businesses 4.0 new insurance software and solutions



Bolster defences against cyber risks and have good insurance coverage in case of damages. For companies investing huge resources in smart technologies, cyber-security must represent one of the pillars on which Industry 4.0 is founded. 

Carlo Ferro

Bolster defences against cyber risks and have good insurance coverage in case of damages. For companies investing huge resources in smart technologies, cyber-security must represent one of the pillars on which Industry 4.0 is founded. According to the Bank of Italy, however, Italian companies are proving quite reluctant on this subject, and many of the elements making up our production system are particularly vulnerable to cyber attacks, data theft and ransomware threats: all dangers that, once occurred, may slow down activities with a fallout on production and turnover. In seven cases out of ten, affected companies are forced to allocate additional resources to restore the damaged systems. According to estimates by experts at Italy’s Central Bank far too many Italian companies are still investing too little in cyber-security. On average, spending on IT security measures does not exceed € 4,530, ranging from a minimum of 3,500 euro for low-tech companies to a maximum of 20,000 in larger ICT firms. Added to this, still according to Bankitalia, insurance coverage tends to be rather low. Starting from this and other studies, Aon, a company specialized in risk consulting, human resources and insurance brokerage, came up with a new insurance coverage for cyber risks. The increasing use of the Internet of Things, the increased demand for cloud platforms and big data analysis are key factors that define the new structure of Industry 4.0.

In such an uncertain scenario full of growing concerns, there are several possible ways to minimize cybernetic risk. For example insurance must be complementary to a solid risk  management policy and IT resilience. "The IT insurance market is constantly evolving," says Arnaldo Galliani, Aon's business development agent. At Aon, we are committed to creating customized solutions designed to meet the needs of organizations around the world". By cyber risk, as established within the insurance market, we mean everything that relates to the IT world, covering both direct and indirect damages incurred by the insured. There are two areas of risk protected by the cyber policy: First party and Third party. First party covers the damages caused by the insured. A first line of defence that falls within this scope, is to protect the company from an interruption of its activities due to either a breach of IT security or human error. In this case insurers provide compensation for the costs of restoring the system. Reimbursement is also provided for the loss of profit incurred due to interruption of business as a direct consequence of the total or partial “blackout” of the company's IT system. To this end, the insurer covers all the costs incurred in measuring and investigating the damages, including costs for legal advisors, IT experts and crisis management consultants in order to understand what happened and calculate the amount and nature of the losses to be covered. A second line of defence falling under the First party category concerns loss of data. In this case the insurance company refunds the insured for the costs of recovering and refreshing data but only as far as the costs to restore / recreate data / software resulting from network security failure.

"One of the peculiar characteristics – says Galliani - of our policies is the compensation for IT legal and crisis management experts who support 24/7, in case of need (violations, IT systems crash, etc.), the customer with all their expertise, the result of analysis, studies and fieldwork developed in recent years thanks to a worldwide network ". Another protection is linked to cyber extortion, notorious due to recent cases such as Petya, NotPetya and Wannacry. In this case the insurer reimburses the insured for expenses incurred in the investigation of a threat and any extortion payments made to prevent or resolve the threat. Furthermore, the insurance company provides additional protection in case of loss reputation, a major concern of customers.

The second line of defence fall under the so-called Third party coverage, and refers to liability protection against third parties. First of all, notification costs such as prints, shipments and other types of communication to the injured parties are compensated. Furthermore, indemnity is also provided in case of legal actions or defence costs arising from claims for damages from third parties. Defence costs and damages suffered by others for content-based injuries such as libel, slander, defamation, copyright infringement, trademark infringement, or invasion of privacy. Another provision relates to defence costs and damages suffered by others resulting from a failure of computer security, including liability caused by theft or wrongful disclosure of confidential information, unauthorized access, denial of service attack or transmission of a computer virus. "In the new millennium, data constitute the lifeblood of continuous interchange between legal and individual subjects - concludes Galliani -. If data cease to be exchanged or were even stolen or copied, the damage could be irreparable. It is therefore necessary to take action in order to make the best use of any tool available, so as to protect this new company assets: information".




Aon is active in the field of risk and human resources management, in insurance and reinsurance brokerage. In Italy 28 industrial groups currently listed in the Ftse Mib index, more than 8,000 small and medium-sized companies, as well as over 700 public administration bodies and companies, rely on Aon expertise. The experience and know-how, combined with the individual skills of carefully selected professionals who work daily in the interest of their customers, result in the ability to offer highly specialized solutions. A specialization that represents an asset of great value, in terms of breadth and detail of its policies. Aon selects among the best insurance companies in the world the ideal partner to propose policies suitable to the real needs of different professional sectors.

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