Industry Focus

Seriously Cybersecurity Insurance

• By Ralph C. Jensen
• Apr 01, 2017

It wasn’t that long ago that cybersecurity wasn’t even part of the physical security dialog. The thought of a network or individual cameras getting hacked brought cybersecurity into the security picture pretty quickly. Cyber questions also arise when discussing cameras being manufactured in China.

Pierre Racz, president and CEO of Genetec, is very frank about his company dropping VMS support for Chinese governmentowned camera manufacturers.

“We have said very categorically, that we don’t support [the cameras] out of the box. You [end user] will need a special license and for us to grant that license you need to sign a waiver that you will hold us harmless if those devices attack you or attack other people on the network,” Racz said.

He also stated that the company is doing everything possible to protect end users from cyber-attacks. In fact, Racz said they have a campaign underway, reaching out to consultants as well as end users, telling them that they should insist on cyber incompetence insurance from manufacturers and from the integrator.

If this concept seems a little far-fetched, it’s not. Cyber and privacy insurance policies have been around for about 10 years. It is not a booming business model, but with so many breaches, so often, perhaps it is a logical investment. An insurance policy would cover a business’ liability for a data breach in which a customers’ personal information is exposed or stolen by a hacker or criminal who gained access to the network.

Cyber insurance underwriters lack knowledge and data to make a policy effective and secure. There are generally more risks relating to IT infrastructure and activities, so where does that place the physical security network? Risks of this nature are typically excluded from traditional commercial general liability policies or at least are not specifically defined in traditional insurance products. Coverage provided by cyber-insurance policies may include first-party coverage against losses such as data destruction, extortion, theft, hacking, and denial of service attacks; liability coverage indemnifying companies for losses to others caused, for example, by errors and omissions, failure to safeguard data, or defamation; and other benefits including regular security-audit, post-incident public relations and investigative expenses and criminal reward funds.

Considering best practices for network security, Fredrik Nilsson, general manager at Americas for Axis Communications has written that all network devices are subject to threats. This most certainly includes network cameras, which are always part of the larger system where the network is the backbone.

“All parts are vulnerable, either as a system or as individual devices, and the system needs protection,” Nilsson has written in his second edition of Intelligent Network Video. “It is not, however, possible to create a system that is 100 percent secure, at least not a usable system. The system can only be made more secure by reducing exposure areas and mitigating risks, but there will always be some level of risk that needs to be accepted.”

Cybersecurity is a weakness in firmware, hardware, system interfaces and so forth where a flaw can be exploited for a malicious attack. That doesn’t mean it would be easy to exploit that weakness.

Limit access to the network and those resources, and when installing an IP camera system, make sure there are no counterfeit parts, and that the chip set does not have a backdoor, allowing unwanted guests to creep inside.

This article originally appeared in the April 2017 issue of Security Today.