Scarinci Hollenbeck, LLC
The Firm
201-896-4100 info@sh-law.comFirm Insights
Author: Scarinci Hollenbeck, LLC
Date: August 3, 2017
The Firm
201-896-4100 info@sh-law.comA recent report warns that the fallout from a large worldwide cyberattack could be as costly as a major natural disaster, topping more than $53 billion. As a comparison, Lloyd’s of London cites Superstorm Sandy, which devastated New Jersey and other East Coast states in 2012.
The report, which Lloyd’s prepared with risk-modeling company Cyence, examines the potential losses associated with two hypothetical cyber incidents. In the first, hackers take down a cloud-service provider, which causes many cloud-based customer servers to fail and leads to widespread service and business interruption. In the second, a cyber analyst loses a bag that contains a hard copy of a report on a vulnerability that affects all versions of an operating system run by 45 percent of the global market. Criminals purchase the report on the dark web and begin attacking vulnerable businesses for financial gain.
According to Lloyd’s, the goal of its “Counting the Cost” report is to help insurers and risk managers quantify cyber-risk aggregation. While costly cyberattacks are on the rise, “the understanding of cyber liability and risk exposures is relatively underdeveloped compared with other insurance classes,” the report notes.
In May, the “WannaCry” ransomware attack spread to more than 100 countries and caused $8 billion in damage. One month later, the virus “NotPetya” spread from the Ukraine to businesses across the world, encrypting data and disabling infected computers along the way. It caused an estimated $850 million in economic losses.
Lloyd’s predicts that losses for future cyberattacks could be much higher. Below are several key findings of the report:
For New York and New Jersey businesses, the report can be helpful in assessing the impacts a major global cyberattack could have on your day-to-day processes. It can also help determine what actions may be necessary to mitigate these risks.
In June 2017, Lloyd’s released another report regarding the cost of cyberattacks. The report, titled “Closing the gap – insuring your business against evolving cyber threats,” warned that many businesses fail to recognize how costly a cyber incident can be, highlighting that reputational harm and loss of competitive advantage can cause long-term damage to a company’s bottom line.
“The reputational fallout from a cyber breach is what kills modern businesses. And in a world where the threat from cyber-crime is when, not if, the idea of simply hoping it won’t happen to you, isn’t tenable,” said Inga Beale, CEO of Lloyd’s “To protect themselves businesses should spend time understanding what specific threats they may be exposed to and speak to experts who can help handle a breach, minimize reputational harm and arrange cyber insurance to ensure that the risks are adequately covered,” she added.
For companies that have not yet considered dedicated cyber insurance, now may be the time. In addition to the rise in cyberattacks and data breaches, many commercial general liability (CGL) policies now expressly exclude such losses. While cyber insurance policies were once reserved for billion-dollar companies operating in high-risk industries, the market has grown significantly in recent years.
Do you have any comments concerning this topic? Feel free to leave a comment below for Fernando M. Pinguelo. If you have any questions about this post, please contact me or the Scarinci Hollenbeck attorney with whom you work.
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Corporate transactions can have significant implications for a corporation and its stakeholders. For deals to be successful, companies must act strategically to maximize value and minimize risk. It is also important to fully understand the legal and financial ramifications of corporate transactions, both in the near and long term. Understanding Corporate Transactions The term “corporate […]
Author: Dan Brecher
Ongoing economic uncertainty is forcing many companies to make tough decisions, which includes lowering staff levels. The legal landscape on both the state and federal level also continues to evolve, especially with significant changes to the priorities of the Equal Employment Opportunity Commission (“EEOC”) under the Trump Administration. Terminating an employee is one of the […]
Author: Angela A. Turiano
While filing annual reports may seem like a nuisance, failing to do so can have significant ramifications. These include fines, reputational harm, and interruption of your business operations. In basic terms, “admin dissolution for annual report” means that a company is dissolved by the government. This happens because it failed to submit its annual report […]
Author: Dan Brecher
Antitrust laws are designed to ensure that businesses compete fairly. There are three federal antitrust laws that businesses must navigate. These include the Sherman Act, the Federal Trade Commission Act, and the Clayton Act. States also have their own antitrust regimes. These may vary from federal regulations. Understanding antitrust litigation helps businesses navigate these complex […]
Author: Robert E. Levy
If you’re considering closing your business, it’s crucial to understand that simply shutting your doors does not end your legal obligations. Unless you formally dissolve your business, it continues to exist in the eyes of the law—leaving you exposed to ongoing liabilities such as taxes, compliance violations, and potential lawsuits. Dissolving a business can seem […]
Author: Christopher D. Warren
Contrary to what many people think, corporate restructuring isn’t all doom and gloom. Revamping a company’s organizational structure, corporate hierarchy, or operations procedures can help keep your business competitive. This is particularly true during challenging times. Corporate restructuring plays a critical role in modern business strategy. It helps companies adapt quickly to market changes. Following […]
Author: Dan Brecher
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!