Bermuda-based Shipowners Insurance and Guaranty Co (SIGCo) is marketing a new product it hopes will help shipowners overcome the cyber risk exclusion added to most hull and machinery cover.
Almost all hull cover will not pay out on a claim if the loss is related to cyber-crime.
SIGCo president Neil Clemens said he has been developing the product along with shipowners for the past four years. However, he said an increase in cyber-attacks has now made it a more pressing issue for the shipping industry.
He said the cyber exclusion in most Lloyd’s and non-Lloyd’s hull and machinery cover is becoming an increasing worry not only for shipowners but banks and financiers as targeted cyber-attacks are on the increase. “Large companies and those with a stock market listing and their financiers don’t want to run the risk that they will be without cover,” Clemens said.
Eye on costs
He added that he hopes to keep the premium of the product down, in some cases to just a few hundred dollars, because the risk of cyber-attack related hull claims is low.
He believes he can generate significant sales through the 12,000 ships to which SIGCo already provides certificate of financial responsibility (Cofr) cover.
The SIGCo Cyber Hull Cover will indemnify owners for loss, damage, liability or expense directly or indirectly caused by the use or operation of any computer system, malicious code, computer virus or process or any other electronic system by any person or group.
However, observers point out that so far there has been no record of a cyber-related hull and machinery claims and that the risk to most shipowners is extremely low.
Clemens admitted: “It is something shipowners don’t want to spend a lot of money on so it must be effective.”
