GAO: Limited cyber insurance poses ‘catastrophic’ financial losses

Major cyberattacks could result in "catastrophic" financial losses for U.S. companies amid increasingly limited cyber insurance coverage brought by the alarming rise in cybersecurity incidents across the U.S., The Verge reports. U.S. entities experienced 26,074 cyber incidents, resulting in damages totaling nearly $2.6 billion, in 2021, compared with only 19,060 incidents costing $470 million in 2016, according to a report from the Government Accountability Office. The GAO noted that such increase in cyberattack costs has prompted private insurers to exclude losses from cyber warfare or deliberate infrastructure attacks in their policies. Insurers have also been reported by the Treasury Department to either reduce maximum policy payments or raise premiums. Infrastructure sectors have also had reduced coverage due to high cybersecurity risks, said the GAO, which urged immediate Cybersecurity and Infrastructure Security Agency and Federal Insurance Office assessment to determine whether a federal insurance program akin to FDIC insurance is necessary for cybersecurity incidents.