The “Internet of Things” is the product of the increasing connectivity of corporate computing infrastructures, industrial machinery and electronic consumer devices.
This provides new cyber threats to businesses which will need to be managed through a combination of robust cyber security measures and cyber liability insurance.
The phase, the “Internet of Things” is associated with devices that are capable of communicating via the internet through programmed commands or by “learning “patterns of behaviour and activity so as to recognize common occurrences in our daily lives and communicating with other devices accordingly
With more devices and people being connected to the internet in the coming years, this will produce a global impact with the estimated market for the “Internet of Things”thought to be $66 billion between now and 2019.
From a business and consumer perspective this has many advantages , whether it be controlling an industrial process remotely to switching on your central heating whilst you are on the way home on a train, it does however come with very real cyber related threats.
The main threat bought by the “Internet of Things” is the vulnerability of the loss of data and the compromising of personal information as devices will have access to such information about a business or individual . This scenario makes it a prime target for a security breach from a targeted hacker attack.
Examples of recent attacks this year :-
- Hacking attack of a German steel mill where hackers gained control of a smelting furnace and caused it to over heat resulting in damage to the furnace and interruption to the business.
- Hackers took remote control of cars steering , braking and acceleration
- Baby monitors being hacked allowing third parties to control the monitors
This year Lloyd’s of London commissioned a report where a hypothetical attack was carried on the electricity grid of the Eastern US. It was calculated that the loss could equate to $2 trillion which would not all be covered by insurance.
A cyber liability insurance policy will provide coverage for both third party and first party losses. This encompasses a businesses third party liability and first party exposures resulting from a data security breach , the response and associated investigation costs . It can also respond to business interruption loss and damage to a businesses computer systems and it’s data. The policy however is unlikely to respond to all first party damage and claims involving bodily injury . It will therefore be necessary for other insurance policies to be reviewed by your insurance broker to ensure that an any gaps in coverage are appropriately addressed.