Also, it is believed that as a result of lack of appreciation of the extent of the cyber
cover, the assureds on occasion end up purchasing more than one insurance product
which would respond to losses arising from cyber risks; or conversely, they would
fail to purchase adequate cyber cover. Specific cyber insurance could provide cover
to the assured against data losses, liabilities, penalties, cyber extortion, and possibly
most significantly, losses associated with business interruption. There is no standard
wording for cyber policies, but most of them would contain conditions and/or
warranties which require the assured to take reasonable precautions such as ensuring
software is patched regularly and firewalls are in place. The assureds must appreciate
the need to comply with such conditions, as otherwise they might well lose their
cover. So far, cases as to the construction of the words used in insuring clauses and
exclusions have not been given judicial airing. Given the increase in the number of
cyber policies sold annually, it is expected that more litigation will emerge in the
years to come.
Cyber exposures are not static but evolve as corporations increasingly rely more
and more on computers on a daily basis. As part of their business, cyber insurers no
doubt follow the changing trends and identify new risks. However, they still struggle
in terms of risk assessment, as cyber risk modelling is in its infancy. The shipping
corporations have only recently started appreciating the extent of cyber threats, and
many still do not realise the scope and nature of cyber risks policies available and the
relationship between such policies and conventional insurance products. It is fair to
say that the sector is experiencing growing pains; but cyber risks are increasing at an
enormous pace, and it is vital particularly for shipping corporations to appreciate
how they can utilise such products in the most efficient manner to manage risks they
face in their business.
References
Cambridge Centre for Risk Studies in collaboration with Risk Management Solutions (2017)
Managing Cyber Insurance Accumulation Risks. Can be found at: https://www.jbs.cam.ac.uk/
fileadmin/user_upload/research/centres/risk/downloads/crs-rms-managing-cyber-insuranceaccumulation-risk.pdf. Last tested on 31 Dec 2018
Cooper S (2019) Cyber risks, liabilities and insurance in the maritime sector. In: Maritime liabilities
in a global and regional context. Informa
GARD Rules 2018, Part II. Rule 34. Retrieved December 31, 2018, from http://www.gard.no/web/
publications/document/chapter?p_subdoc_id¼20747996&p_document_id¼20747880ICC 2009 (A)
International Maritime Organisation (IMO) (2017) Guidelines on Maritime Cyber Risk Management, (MSC-FAL.1/Circ.3). http://www.imo.org/en/OurWork/Security/Guide_to_Maritime_
Security/Documents/MSC-FAL.1-Circ.3%20-%20Guidelines%20On%20Maritime%20Cyber
%20Risk%20Management%20%28Secretariat%29.pdf. Last tested on 31 Dec 2018
Marine Insurance Act 1906.
Cyber Risks Insurance in the Maritime Sector: Growing Pains and Legal Problems
641
cover, the assureds on occasion end up purchasing more than one insurance product
which would respond to losses arising from cyber risks; or conversely, they would
fail to purchase adequate cyber cover. Specific cyber insurance could provide cover
to the assured against data losses, liabilities, penalties, cyber extortion, and possibly
most significantly, losses associated with business interruption. There is no standard
wording for cyber policies, but most of them would contain conditions and/or
warranties which require the assured to take reasonable precautions such as ensuring
software is patched regularly and firewalls are in place. The assureds must appreciate
the need to comply with such conditions, as otherwise they might well lose their
cover. So far, cases as to the construction of the words used in insuring clauses and
exclusions have not been given judicial airing. Given the increase in the number of
cyber policies sold annually, it is expected that more litigation will emerge in the
years to come.
Cyber exposures are not static but evolve as corporations increasingly rely more
and more on computers on a daily basis. As part of their business, cyber insurers no
doubt follow the changing trends and identify new risks. However, they still struggle
in terms of risk assessment, as cyber risk modelling is in its infancy. The shipping
corporations have only recently started appreciating the extent of cyber threats, and
many still do not realise the scope and nature of cyber risks policies available and the
relationship between such policies and conventional insurance products. It is fair to
say that the sector is experiencing growing pains; but cyber risks are increasing at an
enormous pace, and it is vital particularly for shipping corporations to appreciate
how they can utilise such products in the most efficient manner to manage risks they
face in their business.
References
Cambridge Centre for Risk Studies in collaboration with Risk Management Solutions (2017)
Managing Cyber Insurance Accumulation Risks. Can be found at: https://www.jbs.cam.ac.uk/
fileadmin/user_upload/research/centres/risk/downloads/crs-rms-managing-cyber-insuranceaccumulation-risk.pdf. Last tested on 31 Dec 2018
Cooper S (2019) Cyber risks, liabilities and insurance in the maritime sector. In: Maritime liabilities
in a global and regional context. Informa
GARD Rules 2018, Part II. Rule 34. Retrieved December 31, 2018, from http://www.gard.no/web/
publications/document/chapter?p_subdoc_id¼20747996&p_document_id¼20747880ICC 2009 (A)
International Maritime Organisation (IMO) (2017) Guidelines on Maritime Cyber Risk Management, (MSC-FAL.1/Circ.3). http://www.imo.org/en/OurWork/Security/Guide_to_Maritime_
Security/Documents/MSC-FAL.1-Circ.3%20-%20Guidelines%20On%20Maritime%20Cyber
%20Risk%20Management%20%28Secretariat%29.pdf. Last tested on 31 Dec 2018
Marine Insurance Act 1906.
Cyber Risks Insurance in the Maritime Sector: Growing Pains and Legal Problems
641