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A Single Cyber Attack Could Cost Billions

A simulation conducted by Lloyd’s of London, an international insurance service provider, found that a major cyber attack could cause over $53 billion in damages worldwide. This figure dwarfs the estimated $8 billion in damages caused by the recent WannaCry cyber attack in May. Additionally, Lloyd’s of London estimates that over 80 percent of the costs caused by a major cyber attack may not be covered by insurance, as businesses often don’t carry enough cyber insurance to cover such an attack.

In the scenario simulated by Lloyd’s of London, hackers inserted malicious code into the products of a cloud service provider, which then unknowingly forwarded the code to the provider’s clients. When the cyber attack was triggered a year later, businesses, such as financial service companies and health care providers, experienced extended business interruptions.

Lloyd’s of London stated that the total economic impact of such an attack would depend on the organizations involved and the length of the cyber attack. And, although such an attack may seem unlikely, cyber attacks of all types have been escalating for years. In fact, the Department of Homeland Security and the FBI issued a joint warning in June to expect more cyber attacks aimed at financial organizations, critical infrastructure and energy suppliers.

Filed under: Cyber Liability — Jillian Bender-Cormier @ 5:53 pm August 9, 2017