When hundreds of thousands of refugees were taken in in Germany in 2015, some insurers surprised landlords and dormitory operators with substantial increases in building insurance premiums. After all, the occupancy of refugees is associated with a higher risk of fire, so you have to ask for more.
The insurers do not dare to do anything similar in the current wave of refugees because of the Ukraine war. On the contrary, the companies outbid each other with offers of help and free insurance protection for Ukrainians and their hosts.
But large insurance companies are preparing to break another taboo: they do not want to compensate companies for damage caused by cyber attacks if they come from hackers from Russia or Ukraine. The reasoning: This is part of a military conflict, and war is simply not insurable and is therefore clearly excluded in the conditions.
This involves significant sums of money. Cyber damage can easily run into the billions. Because hackers can shut down production with their attacks, cause major fires by switching off alarm systems and force companies to take large IT systems offline for weeks. Product contamination is also possible, for which the manufacturer must compensate customers. If the insurers prevail with the argument “exclusion from war”, companies are not insured for such damages.
Whether the companies will be successful in court is an open question. They lost a similar case in the US. But that they are even considering it shows a certain audacity. For years, the industry has been drumming that every company needs cyber insurance, only then is it really protected. At the same time, insurers have excluded cyber risks from their normal fire and liability policies and have referred to cyber policies they offer themselves. They are now very expensive, and insurance capacity is scarce. Now there is the possibility of refusal to pay.
Of course, exclusions from war make sense in principle. No insurance company can survive when suddenly having to replace all houses destroyed by bombing with their home insurance based on the normal frequency of fires.
But the cyber attacks are not comparable. Germany is not at war with Russia. The cyber attack by a Russian hacker who encrypts a company’s data and demands a ransom for decrypting it is criminal, no question about it. But this is not an act of war. This would only be different if the Russian government explicitly ordered attacks against the infrastructure or important companies. So far nothing indicates that.
The whole thing is reminiscent of the attitude of the majority of insurers in the pandemic. Many restaurateurs and hoteliers had taken out business closure insurance. You should actually pay if a house has to close due to a virus infection. But Covid-19 was not included in the lists of insured viruses, which is not surprising given that the virus did not exist when the policies were taken out. With this argument, most insurers refused to pay and offered 15 percent compensation as a gesture of goodwill, which was of no help to those affected. So far, insurers have largely gotten away with it in court.
Are the corporations really surprised that they are always at the bottom of image surveys?
It’s only in advertising that things are always rosy: insurance companies promise to protect against the imponderables of life. But in major crises such as a pandemic or the Ukraine war, the promise suddenly no longer applies. Resourceful lawyers then look for ways for insurers not to have to pay.
Are the corporations really surprised that they are always at the bottom of image surveys? You should ask yourself whether it is right in every crisis to first consider how to avoid paying. Maybe they should first check what social responsibility they have. Even if the dividends don’t flow that well anymore.