Willis Towers Watson unveiled a new type of cyber insurance product for shipowners that redesigns standard cyber policies to better navigate the risks for ship operators in the digital era.
The solution, CyNav, addresses cyber threats in the broadest sense, including losses that occur from cyber-related business interruptions, even when the cyber events originate with third party IT service providers.
CyNav’s primary focus is to support the continuity of maritime businesses and help shipowners to resume normal operations as soon as possible following a cyber incident.
The product reaches the industry just as the disruptive potential of malware cyber-attacks on the shipping industry recaptures the headlines. Barely a week goes by without new cyber events affecting the maritime sector. Many are minor and unreported, but the major cases have caused consequential commercial losses in the hundreds of millions of dollars. CyNav offers a genuinely pioneering marine-specific cyber solution.
In an environment of increasing ingenuity from cyber criminals and growing levels of cyber security governance in the maritime industry, CyNav anticipates the protection that shipowners need to mitigate their cyber risk.
With the industry’s course set towards ‘smart’ shipping, all links in the global maritime supply chain – ashore and at sea – are becoming more connected. Greater exposure to cyber risk is an inevitable side effect.
Previous events have proven that an attack does not have to be targeted at a specific company to disrupt its business. Organizations can be the unintended victims of cyber events, so risk-transfer solutions need to recognize that a company simply can end up as collateral damage.
The CyNav solution, which allows shipowners to reinforce protection against the specific threats unique to their businesses, is designed by cyber and maritime experts. As such, it addresses the coverage gaps found between standard hull and machinery (H&M) and cyber policies, while ensuring that owners only pay for the protection they need.
It is an important advance in corporate risk-transfer options for an industry where most H&M policies have cyber exclusions and many cyber policies do not cover financial losses when normal business operations are interrupted as a consequence of property damage caused by a cyber-attack.
Under CyNav, compensation for cyber-related business interruptions can include loss of gross profit and increased working costs, including payments on account to help with cash flow (a first in cyber).
This level of coverage is not typically offered in marine policies; recent disclosures by listed companies in the maritime sector have shown that these costs can reach hundreds of millions of dollars.
The cover offered by CyNav is built around the changes in the maritime regulatory framework, including the International Maritime Organization’s (IMO) forthcoming cyber-security guidelines. From January 1 2021, the IMO will make it mandatory for companies to document compliance with a raft of new measures within their vessel’s safety-management systems.
Among those measures are risk assessments, standard cyber-security operating procedures and the education and training of crew and land-based employees. A failure to comply would expose a company to potential vessel detainment.
CyNav offers shipowners the option to protect their business against the cost of certain non-compliance with new regulations -- both those that govern cyber security and data protection – including revenue that may be lost if a ship is detained.
Extending CyNav’s cover to cyber-security legislation provides protection beyond current typical insurance market standards.
Ultimately, CyNav supports business continuity and helps companies to resume normal operations quickly after a cyber event. It is intelligent cyber coverage created specifically for the modern shipping industry and it includes cover from malicious, non-malicious and technical failures.
