A Warning to Business: Lose Identities and You May Lose Your Reputation.

Lockton and Kiln Join Forces to Expand Protection for Identity Theft and Outsourcing for Companies

LONDON -- Data breaches and outsourcing deals have exposed major companies to multiple hundred-million-dollar exposures, but there is a solution according to insurance broker Lockton and Lloyd's underwriting partner Kiln.

As a result of serious data breaches, which often occur when major organizations are targeted by sophisticated technology-literate gangs, the corporate world is facing up to an emerging threat to its income. Reputational loss is also a major peril in today's technology and new media age when it is far easier to lose a reputation (and hence profitability) than it is to build one.

Many companies are now looking to mitigate the potential losses that might arise from data breaches resulting in ID theft and substantial balance sheet losses. They are being assisted by a product, "Business Resiliency Insurance," offered through Lockton and Lloyd's market insurer Kiln Syndicate 510, which has expanded its coverage to address two new areas of risk.

These are direct losses of business income and related expenses as a result of major data breaches (Data Breach Reputation Guard) and direct losses from a disruption to an outsourcing or off-shoring agreement (Outsource Protector).

Emily Freeman, Executive Director of Lockton's Technology and Media team in London, says: "Companies that experience adverse publicity from major data breaches often face a loss of revenue and profits and an increase in expenses because consumers become fearful about the security of their credit card information."

Dan Trueman, special risks underwriter at Kiln, explains: "When a data breach is followed by adverse media attention, the Data Breach Reputation Guard element of the policy will reimburse a business for reputational harm. This means it is covered specifically against the loss of net profit - the difference between anticipated income and actual income that follows a breach - and additional related expenditures incurred during the defined period of indemnity."

The second major area of new coverage, Outsource Protector, addresses non-performance risks associated with outsourcing and off-shoring. Critical business functions, such as call centers and financial processing, and information technology functions such as network management and programming, are increasingly performed by independent contractors, typically to reduce expenses and improve efficiency.

"Non-performance risks arise when the vendor is unable to fulfill the contract due to political violence, forced divestiture, license cancellation, terrorism and other causes," says Emily Freeman. "Outsource Protector will reimburse the named insured for abandonment and relocation costs as well as extra contractual costs of working during the period of indemnity as a direct result of a variety of force majeure perils defined in the policy."

For more information on Business Resiliency, contact Emily Freeman at Lockton Companies International Limited in London at 44-20-7933-2224 or [e-mail].

About Lockton:

Lockton is the largest independent, privately owned, global insurance broker and employs more than 3,800 people. Lockton delivers services throughout the world to businesses of all sizes, as well as individual clients. It was founded by Jack Lockton in Kansas City, Missouri, USA, in 1966 and from a modest, home-based insurance agency, has become one of the largest insurance brokers in the world.

Lockton's international insurance business (including Lockton Companies International Limited) provides insurance and reinsurance broking, risk and insurance programme management and consulting, alternative risk finance, claims management and insurance products and services. Lockton International is a partner in EOS RISQ, Europe's leading insurance broking and risk management consultancy.

Lockton Companies International Limited is authorized and regulated by the Financial Services Authority.

For more information on Lockton and its insurance and risk services, please visit the website at www.lockton.com or www.lockton.com/international.

About Kiln:

Kiln is an international insurance and reinsurance underwriting group with a portfolio of specialist risks. Since 1962, it has built its business on the strength of its underwriting and its relationships.

Kiln is a wholly owned subsidiary of Tokio Marine. Its UK operating company, R J Kiln & Co Limited, has four syndicates at Lloyd's and, in terms of capacity, is one of the largest agencies trading in the Lloyd's insurance market. In addition to Bermuda and the UK, Kiln has offices in Hong Kong, Singapore, South Africa and Belgium.

A recognized leader in each of the five main business areas in which it operates: reinsurance, accident and health, aviation, marine and special risks, and property, Kiln syndicates enjoy a security rating of 'A+' (Strong) assigned to Lloyd's by Standard and Poor's.