Page 16 - Insurance Times May 2019

International

News

Tesla should stick to sell- Property Insurance may not offer protection for cyber
ing cars and not insur- attacks
ance When Mondelez International Inc., the Zurich’s global head of cyber risk, talk-
maker of Oreo cookies and Cadbury ing about the overall market for cyber
Tesla Inc. would do well to stick to chocolate, suffered a malware attack insurance. That creates uncertainty for
making in 2017, it thought the property insur-
and selling insurers and policyholders.
ance policy it had
cars rather Mondelez’s com-
than offer- taken out years ear- plaint isn’t an iso-
ing insur- lier with Zurich In- lated case: Accord-
ance on its vehicles, analysts at RBC surance Group AG ing to a report in
said. would help cover the Times of Lon-
the more than $100
Chief Executive Elon Musk said that million in losses don, law firm DLA
Tesla TSLA, is creating an insurance Mondelez estimated Piper is disputing
product and hopes to offer it in it had suffered. insurer Hiscox Ltd.’s
about a month. A Tesla insurance denial of a multi-
offering would be “much more com- Zurich saw things differently. The in- million-pound claim for losses incurred
pelling than everything else out surer classified the attacks, which also because of a 2017 cyberattack. DLA
there,” Musk said on a call with ana- hit servers of several other big compa- Piper declined to comment. A spokes-
lysts on Wednesday after Tesla’s nies, including Merck & Co. and A.P. man for Hiscox says the dispute with
quarterly results. Moller-Maersk AS, as an act of war. DLA “is not in relation to a cyber
Since the Mondelez policy has a clause policy.”
It would take into account the ve- that excludes acts of war, the insurer
hicles’ enhanced safety features and denied the claim. Mondelez is suing Insurers are seeing an increasing num-
Tesla’s Autopilot, its suite of ad- Zurich for $100 million, claiming the ber of claims for damage inflicted by
vanced driver-assistance systems, as coverage is warranted and calling the hacks under general property policies.
well as information that Tesla could insurer’s response “unreasonable,” American International Group Inc. said
gather about a driver’s risk profile. it received as many cyber-related
according to court documents.
“The barrier is really how much in- Many companies have long-standing claims in 2017 as it did in the four pre-
frastructure would a company like vious years combined.
Tesla want to take on,” said the RBC property insurance policies that offer Financial-and professional-services
analysts, led by Mark Dwelle. “In any a payout if a cyberattack results in
physical damage, but they may not companies topped the list of those fil-
event a lot of added challenge run- ing claims. Businesses with large data-
ning an insurance company for an cover financial damage. Many of those
organization that seems to be some- policies were bought years ago, before bases of clients, such as lawyers and
what challenged in delivering its cyberattacks became almost routine, accountants, have become important
core business of building cars.” and the terms and conditions haven’t targets for criminals given the quality
been updated, according to Lori Bailey, of the data they hold.

16 The Insurance Times, May 2019