Thank you to everyone who attended our second annual New York Insurance Academy on April 16. For more details about this event, click here.
Below, you will find a recap and key takeaways.
- Digital assets and blockchain are here to stay, and insurance carriers are eager to provide coverage to these emerging industries. Alongside adoption, however, the frequency of the theft of digital assets is increasing. Covereds must be aware of considerations that inform underwriting decisions, from how assets are stored to security protocols used by holders.
- To protect their digital assets from theft, buyers must work with brokers to craft effective policies. Covereds must ensure that their policies include their digital assets and that the policies correctly value them.
- The regulatory environment for digital assets is not yet robust. Even so, insurers tend to provide favorable policies towards covereds who embrace a regulated future and behave as such in the present.
- While blockchain adoption is relatively new, the risks of hacking have largely remained the same. The majority of cryptocurrency related hacks occur through the sorts of social engineering and phishing schemes of which risk officers are well aware. Insureds must develop, implement and, most importantly, follow security protocols to protect their digital assets.
- In the instance of disaster, it is best to be prepared. To better assist forensic experts with updated tracking technology, the more information you can gather immediately about the security breach, the better. For a business interruption stemming from a cyberattack, the best practice is to have estimates of business value calculated and ready before the interruption occurs. Because interruptions due to cybercrime tend to be on the shorter side, it is vital to have solid proof of damages.
- Elsewhere, regulators like the New York State Department of Financial Services (NYDFS) Insurance Department are preparing for the already-present future in which underwriters rely upon AI in their decision-making processes and assessing how best to regulate the use these exciting new technologies.
If you have any questions, please contact one of the Haynes Boone attorneys listed below.
