Cyber Security: What The Hack?

In a previous blog post, we discussed how to manage cyber security risks during the negotiation and due diligence stages of an M&A transaction. In this post we discuss cyber security insurance as a tool for managing this unwelcome risk.

The cyber security risk

Although businesses have been ramping up their information security systems, the pace of cyber security breaches is not slowing down. One study estimates that cybercrime will cost businesses $2.1 trillion globally by 2019. And, as recent security breaches have taught us, a security breach can have reputational, moral, and deeply political complications. The 2014 hack of Sony Pictures cost the company $100 million, derailed plans for the distribution a movie concerning North Korea, and raised ethical questions about the appropriate response to cyber terrorism.