Willis Warns Directors They may not be Covered for Cyber Risks
London, UK, August 6, 2012 – The expanding online universe has introduced new financial risks that may
not be covered under general and professional liability insurance, including standard directors’ and officers’ (D&O) policies,
warned Willis Group Holdings (NYSE:WSH) in its latest Executive Risks Boardroom Guide.
As a result, corporate directors and risk managers must ensure that they buy appropriately tailored policies that
provide protection against the rapidly expanding risks to which they are vulnerable, both personally and professionally.
In 2011, companies of all sizes struggled with "cyber incidents", ranging from malicious intrusions to employee negligence.
Indeed, big corporations are not the only ones that are vulnerable to hackers. Half of all
US companies that have experienced data breaches have fewer than 1,000 employees, according to the Willis
Last October, in response to the increasing dependence on digital technologies and associated risks, the US Securities
and Exchange Commission (SEC) issued "Disclosure Guidance", which recommended that public companies disclose, among other things,
"The risks and dilemmas posed by serious data breaches apply to board directors of all businesses,"
said Mark Wakefield, Executive Director of FINEX Global, Willis’ Financial, Executive Risk and Professional Liability business.
"Courts generally are likely to take the view that directors have a duty to gain a
sufficient understanding of the nature of the risks facing their businesses, including cyber risks. Ignorance is
still no defence."
"Against this backdrop the D&O policy has had to move with the times, as buyers and brokers
seek cover for new and previously untested areas of liability," he continued. "Willis has responded with
the introduction of DARCstar in 2011, which provides ‘all risks cover’ that responds better to today's
quick-moving environment," said Wakefield.
Overall, Willis said that the global D&O insurance market has grown in capacity, while a number of
new insurers have entered the market for international excess. The effect of this has been to
keep pricing of D&O relatively stable in most areas, despite the economic turmoil and the heightened
threat of litigation.
"Overall the market has so far weathered the economic storm if not intact, then without any major
disruption," explained Wakefield.
Executive Risks: A Boardroom Guide was produced in connection with White Pages, it has 18 chapters focusing
on legal developments for directors in key jurisdictions, and a further six special focus chapters addressing
issues with global reach. It provides up to date information on the risks and responsibilities that
accompany the role of a director. Copies are available from Willis. Please contact Melanie Ludlow or
Mark Wakefield in the FINEX Global D&O team.
Willis Group Holdings plc is a leading global insurance broker. Through its subsidiaries, Willis develops and delivers
professional insurance, reinsurance, risk management, financial and human resource consulting and actuarial services to corporations, public
entities and institutions around the world. Willis has more than 400 offices in nearly 120
countries, with a global team of approximately 17,000 employees serving clients in virtually every part of
the world. Additional information on Willis may be found at www.willis.com.
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