Demand soars for insurance against cyber attacks in Canada

2013-04-28T030116Z_1_CDEE93R08E600_RTROPTP_3_DUTCH-INTERNET-CYBER-ATTACK-ARREST_original

Insurance brokers say the frequency of high-profile data breaches is causing a surge in demand for insurance products that protect against losses stemming from cyber attacks.

A breach can be costly. Companies face notifying clients that their personal information has been compromised, offering credit protection services, hiring a crisis management firm and defending against lawsuits.

“This is the fastest growing area of commercial insurance in the world right now,” said Michael Peterson, a managing director at Marsh Canada Limited.

“Organizations are realizing that the risk is real, that they’re not quite as secure as they thought and, therefore, they’re taking steps to transfer that exposure to insurance companies.”

Brokers, like Aon and Marsh, estimate there are about two dozen Canadian insurers who provide stand-alone cyber network policies. Most of these underwriters provide cafeteria-style policies, in which clients can pick which losses they want to protect against.

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