Danger of a Cyber-Caused Power Blackout Prompts New Insurance Strategies
The insurance industry is implementing new big-ticket policies to protect grid utilities against damage claims stemming from cyberattacks. This raises issues for utility executives and boards.
Partner Thomas Morante said, "Energy companies are having a hard time persuading insurance companies to cover them. The challenge is that very few carriers are willing and able to indemnify [cybersecurity] risks over $50 million. An attack could trigger incredible disasters, including things we don't want to think about. Insurers really don't know how to price that risk."
Partner Stephen Humes said, "The utility industry is actually lobbying for the federal cybersecurity legislation to include immunity from liability, which gives you an indication that they are not too comfortable relying on the exculpatory clauses in their tariffs."