Energy Industry Needs Insurance Against Cyber Attacks

MarineLink.com
Tuesday, April 08, 2014

Energy companies have no insurance against major cyber attacks, reinsurance broker Willis said on Tuesday, likening the threat to a "time bomb" that could cost the industry billions of dollars.

Willis highlighted the industry's vulnerability to cyber threats in its annual review of the energy sector's insurance market, which called on insurers to find a way to provide cover.

"A major energy catastrophe - on the same scale as ... Exxon Valdez or Deepwater Horizon - could be caused by a cyber attack, and, crucially, that cover for such a loss is generally not currently provided by the energy insurance market," the insurance broker said.

Most insurance products currently available will cover minor things such as data losses or downtime caused by IT issues, but not major events like explosions at multiple facilities triggered remotely by hackers, Willis said.

It said the lack of coverage stemmed from a clause included in most energy sector insurance agreements over the past 10 years that explicitly excludes loss or damage caused by software, viruses or other malicious computer code.

"There can be little doubt that the removal of this exclusion would be the most effective way for coverage to be provided to the energy industry," it said.

But the exclusion clause has remained because cyber security is not well-understood by the insurance industry, making it difficult to design comprehensive products. Additionally, problems lie with how insurers agree to cover damage to multiple plants or platforms caused by a single attack.

The issue is attracting more attention after high-profile events including Stuxnet - a virus that afflicted a uranium enrichment facility in Iran - and Shamoon - a virus linked to cyber assaults on energy firms in Saudi Arabia and Qatar in 2012.

Technology now allows entire oil and gas networks to be operated remotely, but connecting that infrastructure via the internet has also opened the door for hackers and computer viruses to target anything from refineries to pipelines.

The effects of such attacks can range from viruses spreading across a network of household smart electric meters to hackers triggering oil spills or explosions.

Britain estimates that cyber security breaches cost U.K. energy firms around 400 million pounds ($664 million) annually. The U.S. Department of Homeland Security said over 40 percent of attacks on the United States' critical infrastructure assets were aimed at the energy industry in the year to September 2012.

Research firm ABI estimates that global cyber security spending by the industry on critical oil and gas infrastructure will reach $1.87 billion by 2018.

Willis also said companies are also coming under pressure from shareholders and the government to beef up cyber defences, a trend that could lead to the introduction of regulatory requirements aimed at protecting key infrastructure.

"While many in the energy industry may not see regulation as the answer to the problem of cyber-attacks, it remains a strong possibility that energy companies will increasingly be accountable for demonstrating that they have taken every possible step to counter this threat," it added.

($1 = 0.6020 British Pounds)

(By Michael Szabo; Editing by Jane Merriman)

Maritime Reporter June 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Technology

Coast Guard Monitoring Rocket Debris off US

The U.S. Coast Guard informs it is working with SpaceX and partner agencies to monitor the debris field of the exploded Falcon 9 rocket in the Atlantic Ocean more

Tero Marine Secures Boa Offshore Contract

Tero Marine informs it has secured a multimillion (NOK) contract for delivery of fleet management software to Norwegian shipping company Boa Offshore. The Bergen-based

Propulsion Under Wireless Remote Control

Thrustmaster of Texas, Inc. has been supplying wireless remote controls for thrusters since the 1980s, offering products that are supported through their lifecycles

Finance

Monopiles Terminal to Be Built in Rotterdam

Sif and Verbrugge to build terminal for offshore wind energy on Maasvlakte 2   Sif Group, Verbrugge International and the Port of Rotterdam Authority have signed

Shipping Confidence at 7-year Low -Survey

Overall confidence levels in the shipping industry fell during the three months to May 2015 to a level equal to the lowest rating recorded in the past seven years,

Teekay Sells FPSO, Announces Dividend Boost

Teekay Corporation to complete sale of the Knarr FPSO and announces dividend increase of 75 percent   Teekay Corporation announced today that its board of directors

Maritime Security

Pirates and Hold-ups: Crime Strikes Venezuela's Oil Industry

When night falls over western Venezuela, armed gangs known as "pirates" sometimes ride boats into muggy Lake Maracaibo to steal equipment from oil wells.   In the country's Paraguana peninsula,

Activists Planning Protest Against Shell's Arctic Business

U.S. environmental activists said they planned to protest on Tuesday against the launch of the second of two oil rigs central to Shell's plans to drill for oil in the Arctic.

Samsung Bags Order for Decks on Johan Sverdrup

Statoil, on behalf of the Johan Sverdrup license, has awarded Samsung the contract for decks for both the process and riser platforms.  The total contract value is NOK 7 billion.

News

Monopiles Terminal to Be Built in Rotterdam

Sif and Verbrugge to build terminal for offshore wind energy on Maasvlakte 2   Sif Group, Verbrugge International and the Port of Rotterdam Authority have signed

Motion Compensation Solution for Solan Field

Ampelmann provides access solution for commissioning of the Solan project in West of Shetland   Motion compensated access solutions developer Ampelmann informs

Dittmann Named Chairman of SEA Europe

Kjeld Dittmann, the Managing Director of Lyngsø Marine A/S, is the new Chairman of the European Ships and Maritime Equipment Association (SEA Europe).    He succeeds Govert Hamers,

Software Solutions

Tero Marine Secures Boa Offshore Contract

Tero Marine informs it has secured a multimillion (NOK) contract for delivery of fleet management software to Norwegian shipping company Boa Offshore. The Bergen-based

SevenCs Launches New ECDIS Kernel

The new version of the SevenCs ECDIS Kernel SDK (Software Development Kit) 5.20 has been designed to meet all future requirements of the latest international standards

Beier Radio is now Beier Integrated Systems

For 70 years, Beier Radio has provided engineering, sales, and service for marine electronics around the globe. As the corporation marks its 70th anniversary,

Offshore Energy

Monopiles Terminal to Be Built in Rotterdam

Sif and Verbrugge to build terminal for offshore wind energy on Maasvlakte 2   Sif Group, Verbrugge International and the Port of Rotterdam Authority have signed

Motion Compensation Solution for Solan Field

Ampelmann provides access solution for commissioning of the Solan project in West of Shetland   Motion compensated access solutions developer Ampelmann informs

US Issues Potential Setback to Shell's Arctic Drilling

The Obama administration issued a potential setback to Royal Dutch Shell's  Arctic oil exploration plans on Tuesday, telling the company that established wildlife

 
 
Maritime Careers / Shipboard Positions Maritime Security Maritime Standards Offshore Oil Pipelines Port Authority Salvage Ship Electronics Ship Simulators Shipbuilding / Vessel Construction
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.2616 sec (4 req/sec)