Beazley launches cyber policy to strengthen superyacht defences
Risk management has played a key role in the creation of affirmative cyber insurance…
Specialist insurer Beazley has launched affirmative cyber insurance for luxury yachts that protects against physical damage, loss of access, as well as threatened and actual ransom of the vessel. The Cyber Defence for Superyachts also provides in-built risk prevention and immediate response services if there is a cyber breach.
In a recent report by Refinitiv, a part of the London Stock Exchange Group, it was revealed that 71% of respondents said cybercrime became more difficult to contain during Covid-19. Moreover, only 44% of third-party relationships have been through due diligence checks, down 5% from the previous year.
Richard Young, marine underwriter and Head of Hull at Beazley, said: “Following guidelines introduced this year by the International Maritime Organization (IMO), the onus is now greater on vessel owners and operators to demonstrate robust cyber risk management and to understand, assess, and manage risk to improve overall operational resilience in shipping. Reducing the cyber threat to superyachts is at the heart of our policy, which provides a triple defence mechanism of preventative mitigation services, traditional asset indemnity and immediate response services to incidents.”
Cyber security is becoming an increasingly hot topic in the superyacht industry. In a recent digital dialogue series Mike Blake of Palladium Technologies said, “Owners shouldn’t worry so much about physical bodyguards, it’s the tech guys you need to be bringing on board these days.” Corey Ranslem, CEO of the IMSA, recently stated, “Software systems are good, good up to a point where you have the human intervention, and then the human intervention piece is really the most important.”
Kelly Malynn, senior risk manager at Beazley, echoed this notion in an exclusive interview with SuperyachtNews, “I think that goes for all cyber security, there is always an element of human negligence or human exploitation during cyber incidences. However, you can't necessarily solely blame the crew for something like a superyacht which has been designed for luxury and recreation… one of the key risks on a pleasure vessel is that there is so much software that has a lot of coding, and that is where they can be easily disrupted and deliberately targeted.”
Digital technology on board superyachts has continued to enhance safety, efficiency and communications, however this has further increased the interconnectivity of onboard and shore-based systems. This has created unintended complexity, which can lead to system failures and opportunities for prospective cyber attackers to exploit a vessel’s network and leave it more vulnerable to infiltration than ever before.
Strengthening defences and preventing vessels from becoming targets is at the heart of Beazley’s cyber cover for superyachts. A comprehensive risk assessment helps to identify and mitigate potential gaps in security that could leave new policyholders vulnerable. In the event of a breach, the cover will provide immediate response services accessible to policyholders via a 24-hour claims hotline.
The cover includes; Affirmative service-led product to cover physical or threatened damage of the vessel, additional cover for loss of use of vessel and, by endorsement, cover for extortion, service limits for temporary replacement yacht, emergency accommodation, privacy crises response. The insurance also covers cyber event peril including malicious and non-malicious events, not including crew negligence, However crew training will be provided in partnership with Warsash Maritime School, part of Solent University. Post-bind risk assessment preparation services, Post-event 24-hour response services including forensic investigation & restitution, and a USD$25m aggregate policy limit will also be included.
The lack of awareness amongst superyacht owners is something that industry stakeholders have been highlighting more frequently in recent years. Malynn described how, “There are two camps that exist in the superyacht world and they are polar opposites. Some owners are very aware of cybersecurity and are able to transfer their knowledge and practices from other professional industries onto their vessels. But then there are those who view the yacht as a lovely floating luxury hotel that's far removed from anything, which is really just a form of escapism.”
Malynn also went on to describe some of the main potential scenarios that she has witnessed, “At the most extreme end you’ve got attacks on the control system which could lead to physical damage. But you've also got loss of use, so obviously, if there's a ransomware attack on a vessel's power unit and you can't move it when you want to, that’s very high risk.” Malynn also noted some of the lesser considered scenarios, “What connections are being used for CCTV? Vessels need to consider their video streaming and where that's going and who's got access to that. Superyachts should definitely be considering these big areas of risk and whether they have got proper coverage under an insurance policy if those things were to happen.”
Beazley has appointed Cyber Prism to provide the vessel cyber risk mitigation and preparedness services that will assist in advancing security and giving assurance that owners and managers are aligning with IMO 2021 guidelines. The company will also be attending the Monaco Yacht Show in a few weeks time to share their product with the market.
Click here to become part of The Superyacht Group community, and join us in our mission to make this industry accessible to all, and prosperous for the long-term. We are offering access to the superyacht industry’s most comprehensive and longstanding archive of business-critical information, as well as a comprehensive, real-time superyacht fleet database, for just £10 per month, because we are One Industry with One Mission. Sign up here.