Can there be insurance for data loss due to EMP

[EnumaElish]

If an insurer were to offer a policy against data loss from a catastrophic event such as an electromagnetic pulse, the insurer would be in no position to pay when the contingency occurs, the reason being that all of his own bank account will have been wiped clean by the same EMP. Therefore I conclude that such a policy is a logical fallacy and its offer would constitute fraud. What do you think?

 

[Evo]

If an insurer were to offer a policy against data loss from a catastrophic event such as an electromagnetic pulse, the insurer would be in no position to pay when the contingency occurs, the reason being that all of his own bank account will have been wiped clean by the same EMP. Therefore I conclude that such a policy is a logical fallacy and its offer would constitute fraud. What do you think?

What if his information was stored offline? It could be that only the most recent transactions would be lost. Wouldn't an EMP only effect a portion of the world, not the entire world at once?

 

[EnumaElish]

What if his information was stored offline? It could be that only the most recent transactions would be lost. Wouldn't an EMP only effect a portion of the world, not the entire world at once?

Okay, by the same token the insurer's money will have to be held either as physical assets, e.g. gold bars; or they will have to be invested in off-shore accounts. Physical assets are either illiquid or impractical (e.g. prone to theft). Off-shore accounts are aggressively targeted by the US authorities and that makes them uneconomical IMO: http://www.investopedia.com/article...implications-opening-foreign-bank-account.asp

 

[Astronuc]

If an insurer were to offer a policy against data loss from a catastrophic event such as an electromagnetic pulse, the insurer would be in no position to pay when the contingency occurs, the reason being that all of his own bank account will have been wiped clean by the same EMP. Therefore I conclude that such a policy is a logical fallacy and its offer would constitute fraud. What do you think?

The insured is responsible to keep a copy (electronically and/or hard copy of the policy). Financial companies keeps protected backups. Electronic copies can be retained in redundant backup, and electronically stored files can be transferred to optical media, or the devices are placed in Faraday cages, or otherwise secure facilities.

And EMP may fall under and Act of War, so one should read the exclusions in the policy.

 

[jim hardy]

When i lived in Florida Keys my homeowner's insurance company filed bankruptcy Friday afternoon before hurricane Andrew. Needless to say i don't trust them.

Did you see the Frontline about insurance company abuse following Hurricane Sandy ?
http://www.npr.org/2016/05/24/47886...urance-firms-profited-400-million-after-sandy

If an insurer were to offer a policy against data loss from a catastrophic event such as an electromagnetic pulse,...

So far as i know insurance won't pay for damage from an "act of war" , so i'd regard such a policy as a scam.

 

[1oldman2]

My commercial liability policy specifically mentions nuclear war as an "all bets are off" situation.

 

[EnumaElish]

Catastrophic EMP can conceivably fall under terrorism insurance: http://www.insurancetech.com/data-and-analytics/9-11-and-the-insurance-industry-five-years-later/d/d-id/1309633?

Excerpt from the link:

Hartford Financial Products was using backup tapes at that time [September 11, 2001] and the tapes were not sent offsite Friday evening as planned. However, one of the IT staff grabbed the tapes on his way out of the building, according to Lowenthal. " Because of this, at Integro we do not use back up tapes at all. We minimize human error, avoid losing sensitive tapes and have quicker access to data," he says.

Integro uses highly redundant network attached storage to back up all information via a LAN and WAN. However, according to http://www.sungard.com/Availability Services (Wayne, Pa.), tapes are still the number-one method of backup. "There is not a company out there that is not backing up on tape. Having data backed up is just step one of 100 steps insurers have to take. Business continuity is not as easy as inserting a tape, it is about planning and having many backups," says Dave Palermo, vice president of marketing for SunGard.

This was written in 2006. I am pessimistic that much has changed during the decade since. Are terrorism insurance documents and finances being kept in faraday cages? I very much doubt it.

 

[Luqman Muro]

Why are spark-gaps very important in electromagnetic devices

 

[1oldman2]

Why are spark-gaps very important in electromagnetic devices

They can be used as a "circuit breaker" on electronics to protect hardware as well as software from EMP.
http://dtic.mil/dtic/tr/fulltext/u2/a214199.pdf
or page 4 of, http://www.idc-online.com/technical_references/pdfs/electrical_engineering/Spark_gap.pdf

 

[rootone]

A financial organisation could face total loss of data for more mundane reasons than EMP if they relied on keeping everything on one system.
Major fire or flooding for instance.
The fact is they don't rely on one system, they keep multiple backups of everything and the backups are stored in different physical locations.

 

[Logical Dog]

I BELIEVE Even if the bank loses your digital money they HAVE to pay you back. All major forms of money are simply a guarantee that that amount of gold physically exists somewhere, but this has little to do with the question lol.
\
Banks are losing millions due to cyber criminals and are keeping it quiet. Yes this is different but they have to settle! EMP or cyber crime.

Also someone told me banks could keep hardcopies of all accounts but I don't believe them, maybe for large customers like big firms.

Of course such a large insurance firm would have a legal team and an accounting structure/staff that ensures the bank does not get away scot free. insurance firms tend to have physical liquid assets too which they can quickly sell off in such emergencies.\

So, I have to go print out my bank statements soon... otherwise what evidence do I have that I had x amount of money in the bank if and when the EMP hits...

 

[jim hardy]

All major forms of money are simply a guarantee that that amount of gold physically exists somewhere, but this has little to do with the question lol.

?? i think 99% of all money is nothing but debt.
Your money in the bank is a debt the bank owes you. They lend out your cash several times over, creating way more debt that the borrowers owe them. They live off the interest on that larger debt owed to them. They keep just a few percent of your money on hand to cover your checks, figuring you won't want to withdraw it all at once. Look up "Fractional Reserve Banking" . https://en.wikipedia.org/wiki/Fractional-reserve_banking

and watch Michael Lewis's movie "The Big Short" , it's on Netflix and is a real eye opener because it's a true story about banks.

So, I have to go print out my bank statements soon... otherwise what evidence do I have that I had x amount of money in the bank

I still get monthly printouts from the bank that i keep for a few years. Never signed up for e-banking, see my signature.

 

[rbelli1]

will have been wiped clean by the same EMP.

Assuming a global loss of data and telecommunications the least of everyone's worries would be cash.

BoB

 

[Logical Dog]

?? i think 99% of all money is nothing but debt.
Your money in the bank is a debt the bank owes you. They lend out your cash several times over, creating way more debt that the borrowers owe them. They live off the interest on that larger debt owed to them. They keep just a few percent of your money on hand to cover your checks, figuring you won't want to withdraw it all at once. Look up "Fractional Reserve Banking" . https://en.wikipedia.org/wiki/Fractional-reserve_banking

and watch Michael Lewis's movie "The Big Short" , it's on Netflix and is a real eye opener because it's a true story about banks.

I still get monthly printouts from the bank that i keep for a few years. Never signed up for e-banking, see my signature.

"Paper Money
In England, precious metals and coins were used almost exclusively as
money until the middle of the seventeenth century. However, in 1640,
Charles I appropriated £130 000 worth of gold held for merchants in the
Tower of London. Thereafter gold and silver bullion plate were kept in the
strong rooms of the goldsmiths. Eventually receipts for these deposits were
accepted in exchange for goods, and so withdrawal of the actual gold and
silver became unnecessary.
This was the origin of the bank-note, and paper currency soon began to
form an increasing proportion of British money. The paper from which
notes are made is comparatively worthless. But people who receive notes
are confident that others too will accept them. Notes possess, therefore,
the essential characteristic of money - general acceptability. This is true
even though, since 1931, it has not been possible in the United Kingdom to
exchange notes for gold at the Bank of England.
"

Oh man...it turns out few currencies, if any, are backed by gold or metals (from the 70s), they are backed by GDP.

i think it is BAD most money exists and will continue to exist as abstractions on bank papers and digital spaces BUT the vast quantities of money are not something anyone wants.

 

[Ucha]

If an insurer were to offer a policy against data loss from a catastrophic event such as an electromagnetic pulse, the insurer would be in no position to pay when the contingency occurs, the reason being that all of his own bank accounts will have been wiped clean by the same EMP. Therefore I conclude that such a policy is a logical fallacy and its offer would constitute fraud. What do you think?

As others stated, a companies information would likely still be stored offline. Also it might just depend on how an insurance company classifies an event. There are quite a few resources on this topic via a google search actually. Some companies specifically exclude things such as electromagnetic pulses from their cybersecurity policy such as this article and company.

This resource has great information but doesn't exactly mention this specific event. They do list "Business Interruption" which might fall under the umbrella of an EMP though.

I think that the likelyhood of this event even occurring is as comparable to winning the lottery so, and if it does occur there might just be bigger things to worry about lol.

 

[BWV]

All money is debt secured by the sovereign's ability to collect future tax revenues

That is not a value judgement, just a statement of fact. No country still uses a gold standard (and gold is just as arbitrary a measure of value as fiat currency)

Why would an EMP vaporize all stored data? Would not ordinary business continuity coverage protect against losses due to not being able to operate due to an EMP?

And its not like people are not taking the risk seriously:
https://www.computerworld.com/artic...ts-against-solar-storms-and-nuclear-emps.html