Cyberattacks may force companies to finally assess cyber risks
Horace C. White
Modern Tokyo Times
Mondelez vs. Zurich case turn the spotlight on insurance companies
Much as the widely reported NotPetya malware attacks are gradually disappearing from the headlines, its aftermath still holds sway. Apparently, the Mondelez vs. Zurich Case has become a constant reminder that several companies are still grappling with the cyberattack. In what will be perfectly described as whetting enthusiasts’ appetites, many long to see how it all ends. But before going any farther, a brief history of the NotPetya attack will give an insight into this matter.
For those who are unfamiliar with the development, a variety of popular malware Petya – called NotPetya ransomware – attacked many companies’ computer networks around the world. The ransomware attacks, which happened in June 2017, had disrupted their operations, culminating in huge losses. Property Claim Services (PCS) report noted that the victims of the malware attack incurred more than $3 billion in losses.
While a few of them have let the compensation for their losses ride, US food company Mondelez International Inc. is not ready to forgo theirs. Consequently, the food manufacturer has filed a lawsuit against its insurance firm, Zurich. Determined to have Zurich pay for everything it has lost, Mondelez International Inc. demands its insurer to pay $100 million in compensation.
Impact of the Virus
According to Robert Stines, a cyber law expert, Mondelez International Inc. is one of the companies hard hit by the NotPetya cyberattacks. In his article, Stines maintained that the US food company, which owns the popular Cadbury and Oreo brands, had its computer software and hardware systems shattered as a result of the malware. While explaining the impact of NotPetya, the legal practitioner said that the cyber incursion disrupted Mondelez’s orders and damaged its property. On the other hand, Mondelez disclosed that it lost about 24,000 laptops and 1,700 servers.
Similarly, the White House described NotPetya as “the most destructive and costly cyberattacks in history.” Believed to be Russia-sponsored attack, media reports say that the NetPetya affected about 100 countries around the world, causing losses of immeasurable proportions.
Mondelez insurance details reaching our sources state that Mondelez’s insurance covered a wide spectrum of eventualities. As contained in its cyber insurance policy, Mondelez is fully insured against all physical losses and damage. Furthermore, the leading food manufacturer and the brand owner is covered against losses emanating from computer codes and instructions. Besides, the analysis of its insurance protection shows that Zurich will have to compensate Mondelez if it experiences damage to its electronic data.
Indeed, this case has turned the spotlight on the activities of insurance companies with respect to their willingness to pay insurance claims. The Register reported that Zurich had earlier approached Mondelez with $10 million to pay off the insurance claim. However, the food manufacturer turned down the offer, drawing an analogy between the malware attack and a war-like attack in the time of peace by a powerful government. Given that the two companies are unable to reach a compromise, Mondelez feels that a court of justice is the only forum in which it can get the insurance company to cough up the desired compensation. In its estimate, Cyence, a cyber risk analytics firm, says that insurance companies will pay nearly $81.7 billion in compensation to cover the costs of NotPeya and other cyber attacks.
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