Business owners, CFOs and Risk Managers take notice! COURANT recently reported that a top state regulator warned that, “Connecticut’s utilities are likely to be targets of cyberattacks by computer hackers and the state needs to ‘wake up, strengthen our defenses and prepare to manage the consequences’.” This warning is significant as it has bearing on all utilities across the United States. No geography is immune from possible attack.
According to COURANT, “Arthur H. House, chairman of the [Connecticut] Public Utilities Regulatory Authority, told business leaders that he is often ‘amazed by those who ask whether there is a serious possibility of a cyberattack on American utilities’.” “There will be a cyberattack on our utilities,” House said during an address to the Connecticut Business and Industry Association’s conference in Farmington on energy and the environment. House pointed out that, “to many people in the world, the United States introduced cyber weaponry and continues to use it today.” He said the United States is “widely seen as having initiated cyber warfare for alleged participation in the Stuxnet attack” that was designed to disrupt Iran’s nuclear program.
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House’s warning also has significant bearing on business owners across the U.S. Many businesses are not prepared to survive a lengthy power outage and few are properly insured for such a contingency, including insurance that replaces lost revenue in the event of a cyber attack or prolonged utility disruption.
One way that businesses can prepare is to implement Enterprise Risk Management and own their own Captive Insurance Company (CIC). CIC ownership is ideal when facing uncertainty because it enables business owners to insure a broad range of risks and efficiently address business interruption and lost revenue. With proper planning, CIC insurance policies can also be written with minimal exclusions, thereby giving their owners the flexibility needed when the unexpected occurs. Finally, because CICs receive favorable tax treatment, they are an ideal vehicle to accumulate mush needed loss reserves for the future.
Connecticut’s Arthur House summarized the situation well. “Given the hostility toward the United States and the perception that Americans began the use of cyber warfare, we would be irresponsible and naïve not to prepare for a strike against our utilities here at home.”
According to House, “The way forward is not in denial or in waiting for an attack to prove once again how resilient Americans can be in responding to disaster…We need to draw upon our strength to defend against a clear and present danger.”