Q&A
Jon Bateman, Andy Masley
{
"authors": [
"Jon Bateman"
],
"type": "legacyinthemedia",
"centerAffiliationAll": "dc",
"centers": [
"Carnegie Endowment for International Peace"
],
"collections": [],
"englishNewsletterAll": "ctw",
"nonEnglishNewsletterAll": "",
"primaryCenter": "Carnegie Endowment for International Peace",
"programAffiliation": "TIA",
"programs": [
"Technology and International Affairs"
],
"projects": [],
"regions": [
"Iran"
],
"topics": [
"Technology"
]
}
Source: Getty
In The Media
Does Your Cyber Insurance Cover a State-Sponsored Attack?
Modern businesses face a level of cyber risk that vastly exceeds the protections they can rely on from either insurance or government relief. To address this shortfall, business leaders must work with insurers and policymakers to devise practical, long-term solutions.
By Jon Bateman
Published on Oct 30, 2020
Source: Harvard Business Review
In 2017, Merck lost an& eye-popping $1.3 billion when it got caught in the crossfire of a Russian cyberattack targeting Ukraine. The event, later dubbed NotPetya, was the largest cyberattack in history, costing $10 billion worldwide — economic damage akin to a medium-sized hurricane, or a small war. Western governments vowed to hold Russia accountable, yet none stepped forward to support the companies that were hit by the attack.
Insurance was more helpful — to a point. The insurance industry sells policies specifically designed for cyber incidents, but their scope and scale remain limited. Cyber insurance paid for just 3% of NotPetya’s global damage, leading some NotPetya victims to turn to other insurance policies with more ambiguous terms. For example, Merck invoked property and casualty policies that covered all manner of hazards without explicitly mentioning cyber incidents. These policies had so-called “war exclusions,” which barred coverage for damages due to “hostile or warlike actions” by governments or their agents. Many insurers cited these clauses to push back on the claims, triggering high-stakes legal battles that continue to this day.
This article was originally published in the Harvard Business Review.
About the Author
Jon Bateman
Senior Fellow and Co-Director, Technology and International Affairs Program
Jon Bateman is a senior fellow and co-director of the Technology and International Affairs Program at the Carnegie Endowment for International Peace.
- Is AI as Bad for the Environment as Everyone Thinks?
- Are All Wars Now Drone Wars?Q&A
Jon Bateman, Steve Feldstein
Recent Work
Carnegie does not take institutional positions on public policy issues; the views represented herein are those of the author(s) and do not necessarily reflect the views of Carnegie, its staff, or its trustees.
More Work from Carnegie Endowment for International Peace
- We Need Ongoing Monitoring of AI and Political InformationArticle
Monitoring is essential so that policymakers and the public can understand—and have a say in—how AI systems affect politics.
Danaé Metaxa , Alex Engler
- Caught in the Middle: Chinese Biotech Firms’ Divergent Responses to U.S. SanctionsCommentary
Chinese biotech companies have been on the receiving end of U.S. economic coercion. Yet their responses have differed significantly because firm and state interests are not uniformly aligned. For Washington, treating all Chinese tech firms the same, irrespective of their actual interests, risks pushing them farther into Beijing’s corner.
Xue Gong
- Inside the Global Race to Erode a Battery Manufacturing MonopolyCommentary
Over the past decade, China has moved from marginal player to major producer of all things batteries. The United States, Europe, and others are aiming to balance the market.
Milo McBride
- Why Korea’s President Skipped Washington for Silicon Valley and BrasíliaCommentary
Lee’s tour shows how Seoul is reorganizing its diplomacy away from Pyongyang and toward industrial networks and the geography of the compute economy.
Darcie Draudt-Véjares
- Confronting the Barriers to AI Diffusion in the U.S. MilitaryPaper
The Pentagon is calling for a rapid AI transformation. Autonomous drones offer a case study in the eight bottlenecks the U.S. military must navigate to realize that vision.
Jake Steckler
