Lloyd’s to Back Hacker Insurance

Lloyd’s of London will offer as much as $100 million in insurance coverage to corporate clients of computer security management firm Counterpane Security Inc. against hacker losses to their business or their customers. Counterpane, in an announcement expected today, claims to be the first Internet security service provider to provide a guarantee of direct financial reimbursement in the event a hacker breaks through its defenses and uses customer data. The guarantee is underwritten by insurance brokers Frank Crystal & Co. and SafeOnline, with additional coverage available from Lloyd’s, the world’s leading insurance market. An FBI-funded report in March, based on responses from 643 companies and government agencies, suggested an epidemic of computer crime is underway across the U.S. Since March 1999, nine out of 10 organizations reported computer security breaches.