Business interruption from a cyberattack, natural disaster or other catastrophic event is the biggest risk facing the power and utilities sector, according to a new report from
EY.
The international firm found that the power and utilities industry faces a host of threats with over 80% of respondents ranking business interruption in their top three concerns. Georgina Crundell, EY partner, cyber security, said that the power and utilities sector needs to have adequate controls in place to address these rising issues, and the insurance industry can play its part in helping the sector.
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“There are insurance solutions in the market which will help power and utility firms to respond to cyber incidents and recover from business interruptions,” Crundell told Insurance Business. “The insurance industry is evolving quickly with every cyber incident - with each incident more is learned about the threats and the losses.”
In terms of insurance brokers, Crundell said they have a “huge role” to play in educating executives in the power and utilities industry about their risks and what can be protected from both a cyber and business interruption perspective.
“We need to be careful not to scare-monger, but to be objective about the cyber risks and potential for losses,” Crundell said.
She suggested that brokers can help their clients with simple questions on their potential cyber response, business continuity planning and whether clients understand the “most valuable data” that they possess.
In addition, she noted that many power and utilities organisations remain “sceptical” of cyber insurance and often only take out cover as it is mandated by boards.
“Insurers can help their customers by being more transparent on the scenarios they will and will not cover,” Crundell continued. “To do this, there needs to be a clear articulation of the cyber risks organisations potentially face, and the level of cover provided in the event of these scenarios occurring.”
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