The impact of global privacy laws on cyber risk mitigation
July 31, 2014
As the potential costs of security breaches grow and risk management experts begin
convincing senior company management worldwide that all organizations are vulnerable
and will suffer some kind of breach eventually, enterprises across the globe likely will
consider cyber risk insurance as a risk-financing option. For multinational companies,
however, covering operations in another country under a non-admitted global master
program rather than a locally admitted insurance policy could lead to a multitude of
complications in the event of a loss.
Given the likelihood and cost of a data security breach, organizations around the world — as U.S. companies already are beginning to — might turn to cyber insurance to finance this risk. But a multinational company can expect coverage problems and other difficulties if it eschews locally admitted coverage and instead relies on a worldwide policy to cover its global cyber risks, since many countries bar non-admitted insurance.