As cyber attacks and events increase across industries, evolving regulations are driving greater financial and regulatory exposure by raising the risk of substantial fines and penalties for organizations and senior executives who fail to maintain compliance, according to Aon's report, The Insurability of Cyber Fines.
Businesses operated in Europe, the Middle East and Africa (EMEA) are more at-risk of exposure to cyber-related fines, and while this exposure only intensifies,
Pablo Constenla, head of coverage and claims for cyber and financial lines at Aon in EMEA, said, in a press statement, "The regulatory landscape for cyber is evolving rapidly, with regulators taking a much more hands-on approach to enforcement, from testing technical controls to imposing penalties - which could also boost third party liability. Businesses need to understand how fines and penalties are treated across jurisdictions and ensure that their governance, reporting and compliance frameworks are robust enough to withstand scrutiny."
The report also shares two practical actions for organizations to take: monitor regulatory changes by staying up-to-date with new cyber-related laws and regulations, and adequately prepare for incidents by establishing response and breach notification procedures. Other general recommendations from the report include working with brokers and legal counsel to optimize your cyber insurance coverage and insurable costs, establishing clear accountability for cyber risk management at board and senior management levels, training your staff on cybersecurity and data protection requirements, as well as monitoring third-party risks to ensure contracts address cyber incident responsibilities.
David Molony, head of cyber solutions EMEA at Aon, said, "Cyber risk is not just about the likelihood of an attack or data breach, businesses should also consider the financial and reputational impact of regulatory consequences. Organizations that integrate incident response planning with risk oversight and cross-functional coordination are better positioned to absorb shocks and to maintain operational resilience amid an increasingly complex environment."
