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Insurance Coverage for Cyber Attacks

BY Roberta D. Anderson
April 29, 2013

There's no denying that the present-day Internet, while extraordinary, is increasingly scary. Cyber attacks of various types continue to escalate across the globe. As stated by one recent commentator: “Cybercrime is raging worldwide.” Kevin Robinson-Avila, “Cyber attacks on the rise worldwide,” ABQJournal (Dec. 17, 2012). Reports of high-profile cyber attacks make headlines on an almost daily basis. In recent weeks and months, sophisticated distributed denial-of-service (“DDoS”) attacks on at least 26 of the largest U.S. banks reportedly breached some of the nation's most advanced computer security, rendering bank websites unavailable to customers and disrupting transactions for hours at a time.

The headlines confirm the reality: Cyber attacks are on the rise with unprecedented frequency, sophistication and scale. And they are pervasive across industries and geographical boundaries.

While no organization is immune from cyber attacks, it is uncertain that companies are sufficiently aware of the escalating onslaught. Even companies that are sufficiently aware of the problem might not be sufficiently prepared. It is abundantly clear that network security alone cannot entirely address the issue. As noted by one observer: “[t]here is no fail-safe technology that is immune to hacking. Online security will evolve as hackers and security experts work continuously to outwit each other.” “The Cloud Darkens,” N.Y. Times (June 29, 2011).

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