The rapid spread of the Internet of Things (IoT) and an increasing number of devices that individuals and businesses use in their everyday lives have opened up the world of cyber risk to “silent” cyber incidents.
“Up till now, the way we think about risks and the way the insurance industry has been going about insuring these risks are all physical. Take our home – we’re worried about hurricanes, earthquakes, fire, wind damage – things like that which are quite physical,” said Prashant Pai, VP of cyber strategy for risk modeling solutions provider AIR Worldwide. “But now, everything is getting more digital and we haven’t really thought about what risks may lie in the digital world.”
The physical and the digital are becoming intertwined because of IoT devices and industrial control systems (ICS) that are connecting many physical assets. “Silent” cyber accounts for risks that can impact insurance coverages and haven’t been seriously considered before, explained Pai.