RE: Lloyds to offer hacker insurance

From: Kevin Tyrrell (tyrrellat_private)
Date: Wed Apr 29 1998 - 07:36:25 PDT

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    >From our perspective writing a policy is akin to legalized gambling. We
    accept your premiums and bet we can invest it and get a return on it before
    we have to pay it back as a claim.
    
    We have been insuring mobile homes, RVs and travel trailers for the last 45
    years. In that time we've gotten to know these products really well. We
    insure against the usual things - fire, theft, natural causes (tornadoes,
    hurricanes, floods, lightning, etc). We have a pretty good idea of what to
    expect in terms of exposures from this stuff. We can calculate our odds
    pretty well since the exposures are pretty well known.
    
    So Lloyds brings in some "experts" to review our security policy, inspect
    our network, review our user training, interrogate all the users to make
    sure they're honest, bla, bla, bla and they certify us as insurable
    (secure). We're all set, we can go back to sleep now. The next month we have
    hurricanes in Florida, floods in CA, tornadoes in Indiana. Someone decides
    to have some fun and pushes through a hole in the new firewall system we
    just installed. This brings our network down so we can't process claims.
    After a day or two we'll be history. So Lloyds pays us a million $$, just
    enough to pay for gracefully closing the doors.
    
    Or say Lloyds insures a lot of companies who use version X.0 of OS YYY as
    the basis for their firewall system. Of course they're all insurable
    (secure), since they've been certified by the "experts". So what happens to
    Lloyds when the next killer 'sploit is used on the majority of these systems
    all at once. I don't see how Lloyds can calculate the odds of loss from an
    exposure they don't even know exists. At least we're pretty sure we won't
    see a bunch of mobile homes destroyed by volcanoes erupting in Tampa.
    
    We are in the midst of installing a firewall and a direct Internet
    connection. We have researched firewall systems very carefully for about a
    year. We have put an enterprise wide security policy in place. We're
    removing the back doors. We have started a security awareness program. We
    also feed and house some of the "experts" every now and then. These types of
    actions are what make up our insurance policy.
    
    Buying insurance against "hackers" might actually make some companies less
    secure. They have been certified as insurable (secure), so they can put
    security on the back burner until its time for next year's checkup, then
    they get whacked. But hey, they got insurance.
    
    
    Kevin Tyrrell
    Foremost Insurance Co.
    
    Disclaimer:
    
    These opiini^H^H damn! ^H^H ^Q ^[ .... :w  :q
    :wq  :wq! ^d  ^X ^? exit X Q  ^C ^? :quitbye  Ctrl-Alt-Del   ~~q
    :~q  logout  save/quit :!QUIT ^[zz ^[ZZZZZZ ^vi  man vi ^@
    ^L  ^[c  ^# ^E ^X ^I ^T ? help  helpquit ^D  ^d !! man help ^C
    ^c :e! help exit ?Quit ?q Ctrl-Shft-Del "Hey, what does Stop L1A
    d..."
    
    
    
    -----Original Message-----
    From: owner-firewall-wizardsat_private
    [mailto:owner-firewall-wizardsat_private]On Behalf Of David Lang
    Sent: Tuesday, April 28, 1998 9:52 am
    To: Marcus J. Ranum
    Cc: Firewall Wizards List
    Subject: Re: Lloyds to offer hacker insurance
    
    
    -----BEGIN PGP SIGNED MESSAGE-----
    
    Remember what insurance boils down to, a gamble
    
    ... snip ...
    



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