Latest News- Cyber Insurance for Business

Cyber insurance supports your business in protecting against a variety of risks if you suffer a damaging event such as a cyberattack.

As businesses become increasingly dependent on digital technology for their day-to-day operations, the exposure they face to cyber risks has also increased. It is important to have comprehensive cover in place to protect business owners, investors, service providers and other professionals who are responsible for managing the risks associated with cyber exposure. 

The risk of losing money and data, or technology failing due to unintentional or malicious interference has never been greater. Cyberattacks disrupt businesses of all sizes in all industries. In many cases, this can lead to reputational damage, operations downtime, economic loss and legal penalties.

Cyber insurance, also known as Cyber Liability Insurance, provides a means of addressing this exposure through an array of policy solutions that can be adapted to suit individual needs across all stages of the digital age.

The cover is geared to respond quickly to malware attacks, hacking incidents and data breaches by funding investigation and compensating losses.

 

Contents

 

•  How do cyberattacks affect business?

•  An example of a cyber incident

•  How can cyber insurance protect my business? 

•  How much cyber insurance will I need?

 

How do cyberattacks affect business? 

 

Even if your business doesn’t function primarily online or process large amounts of data, the likelihood is that you will still have a risk exposure and cyber insurance is vital in managing that.

Here are some examples:

Management Consultant - Experiences a cyber attack and suffers a loss of income from being locked out of multiple essential software packages. Additional expenses as you attempt to recover a compromised system containing client data.

Healthcare Provider - A cyber event leads to business interruption resulting in cancelled appointments. Increase in employee overtime to handle the additional workload and rerouting of essential operations and services.

Retail Outlet - Following a privacy breach, your customers' credit card information is stolen.  You have to pay the cost of notifying the affected parties along with the regulatory fines and penalties.

Transport/Logistics - A ransomware attack locks you out of your network and prevents you from using its tracking system. Resulting in long delays, lost items, customer complaints and overtime personnel costs.

Marketing Agency - Suffers from a data loss. Leading to a privacy complaint that incurs steep legal fees. The resultant reputational damage impacts your public image.

 

An example of a cybercrime incident

 

A construction firm carried out some light refurbishment work at an estate agent’s office. After completing the work, they agreed to email an invoice to the estate agent.

However, the construction firm was unaware that their email network had been compromised by a cybercriminal. The criminal waited for the opportune moment and then sent a fake invoice from the compromised email account. The estate agent paid the fake invoice.

A few days later, having not received a receipt of payment, the estate agent asked the construction firm if the monies had been received. At that point, it became clear that a cyber incident had occurred. The construction firm was liable for the mistaken fund transfer, as it was their network that had been breached. 

 

How can cyber insurance protect my business?

 

Protect your business from the following exposures: 

 

Cybercrime     +

 

Minimise the impact of cybercrime with cover for the electronic theft of funds.

This includes cover for social engineering scams where an individual is manipulated into the transfer of funds to a criminal, and extortion.

 

Business Interruption          +

 

The event of a system outage can result in a significant loss of profit. Business interruption cover can include your financial loss caused by an attack preventing your business from being unable to trade as normal.

This also extends to reputational damage, for example, the loss of contracts as a result of a cyber event.

 

Extortion Costs          +

 

Cyber extortion involves hackers holding your data, website, business, computer systems, or other sensitive information hostage until you pay for their demands.

The only way to restore access is to pay the hacker. Cyber insurance provides coverage to mitigate the financial impact of these incidents.

 

System Damage          +

 

A breach will typically involve some kind of system damage. Confidential records are compromised, data is corrupted, files are missing.

Cyber insurance covers your costs to find the root cause of the problem and restore or replace essential equipment.

 

Notification Costs          +

 

When you are required by law to notify affected individuals or the appropriate authorities of a data breach, cyber insurance will cover you for the costs of providing notice.

 

Privacy and Network Liability          +

 

This is cover for defence costs and compensation you are legally liable to pay to a third party.

Notably for instances including failure to protect customers personal data, breach of confidentiality or the inadvertent transmission of a virus.

 

Fines and Penalties          +

 

As if suffering from a cyber-attack wasn’t enough, you may be liable for fines and penalties resulting from a regulatory investigation. 

 

 

How much cyber insurance will I need?

 

The level of cover required for your business is dependant on the cost to get you back up and running following a worst-case cyber incident. 

Cyber insurance is like any other type of insurance in that the cover you choose will depend on the type of business you are running. This approach ensures your business has sufficient funds to cover periods of inactivity, or if criminals make a ransom demand.

Related links

 

•  Cyber Insurance - Do I Really Need It?

•  Watch Our Webinar - Cyber Risks and Data Security

•  The Growing Ransomware Risk

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