Insurance definitions of cyber war
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Insurance definitions of cyber war Daniel W. Woods1 · Jessica Weinkle2 Received: 7 October 2019 / Accepted: 28 March 2020 © The Geneva Association 2020
Abstract Definitions of war found in cyber insurance policies provide a novel window into the concept of cyber war. Mediated by market forces, changes in policy wording reflect shifting expectations surrounding technology and military strategy. Legal cases contesting war clauses probe state-formulated narratives around war and offensive cyber operations. In a recent legal case, an insurer refused to pay a property insurance claim by arguing the cause of the claim—the NotPetya cyberattack—constitutes a hostile or warlike action. To understand the implications, we build a corpus of 56 cyber insurance policies. Longitudinal analysis reveals some specialist cyber insurance providers introduced policies without war clauses until as late as 2012. Recent years have seen war exclusions weakened as cyber insurance policies affirmatively cover “cyber terrorism”. However, these clauses provide few explicit definitions, rather they prompt a legal discourse in which evidence is presented and subjected to formal reasoning. Going forward, war clauses will evolve so insurers can better quantify and control the costs resulting from offensive cyber operations. This pushes insurers to affirmatively describe the circumstances in which cyber conflict is uninsurable. Keywords Cyber war · Cyber insurance · Politics · Terrorism · International relations
Electronic supplementary material The online version of this article (https://doi.org/10.1057/s4128 8-020-00168-5) contains supplementary material, which is available to authorized users. * Daniel W. Woods [email protected] 1
Department of Computer Science, University of Innsbruck, Innsbruck, Austria
2
Department of Public and International Affairs, University of North Carolina Wilmington, Wilmington, USA
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D. W. Woods, J. Weinkle
Introduction What constitutes war? Where is the threshold for hostility at which society can no longer tolerate the resulting damage? Ethical arguments suggest the answers can be found in reason. Realists assert that these questions are decided by the powerful. Constructionists argue shared expectations about reasonable behaviour shape such decisions. Markets offer answers in the form of war clauses in insurance policies. Such clauses are used to withdraw coverage for losses related to military operations. Insurers draw the line between war and peace because the underwriting assumptions fundamentally differ. Doing so necessitates anticipating and defining which war-related events threaten the existence of a private market. Disputes over whether war clauses apply may prompt a legal discourse resulting in a symbolic ruling. War clauses, however, have significance beyond the insurance industry and its customers (Strange 1996; Lobo-Guerrero 2012a). The British government discovered this when war exclusions in marine insurance threatened to halt sea trade in the lead up to World
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