Cyber Insurance: Why you should invest in additional protection for your business
Insurance that protects you in the event of a cyber-attack may seem like something only a large corporate organisation would require. However, cyber criminals are non-discriminative, using malicious codes across the internet to search for vulnerabilities, with the potential to attack business of any size, anywhere in the world.
These criminal activities commonly referred to as ‘cyber-crime’ can not only result in significant financial losses but also significant interruption to a business. So how do you know if you’re at risk? Your business could be vulnerable to a data breach or loss of vital business services if you:
- Hold sensitive or personal information about your customers such as their name, address and banking details
- Are reliant on computer systems for your business to function
- Have a website
- Are subject to a payment card industry (PCI) merchant services agreement.
The Office for National Statistics recently revealed there were 2.5m incidents of cyber-crime between May and August of 2015, that’s a mere 4 months. Cyber-attacks are becoming an ever increasing threat with not a week going by without reports in the media ranging from denial of services attacks on online banking to nationwide broadband failures and telephone disruption for customers.
Criminals use a variety of methods to target their victims which can result in reputational damage, loss of assets or intellectual property. In a recent BBC phone-in a business discussed how they were affected by a virus which they received via a rather innocent looking email. Within no time a ransom note followed demanding money to have their access restored. They didn’t know what to do to sort out the problem but they decided from the outset that they wouldn’t pay anything to the criminals. It took 3-6 months to restore everything as they hadn’t carried out regular backups so some information such as invoices was lost to them. They described the impact as being devastating to their business and very difficult to recover from. Today they back up every day and change passwords regularly (Source: Aviva Insurance).
Cyber-crime can happen to businesses of all shapes and sizes. It is therefore important to take steps to protect your information and that of your customers. If you’re still not convinced on whether you need to invest in additional protection for your business, please consider the following key points:
- Information you hold and process; what might be the cost to your business if this information is lost, distorted or destroyed?
- The systems you are reliant upon; how is your business impacted by loss of or disruption to your systems?
- Your liability to others; how will you fund any defence costs and awards of damages e.g. for privacy breach, breach of confidentiality, defamation etc.?
- Regulatory and Legal compliance; how would you respond to a Privacy Regulatory Action and deal with Privacy notification Expenses?
- Your organisations money; what measures do you have in place to combat social engineering hacking, phishing and pharming?
No two businesses are the same when it comes to cyber liability and this article by no means covers all risks that could present themselves as a cyber-attack to your business; therefore it is vital to understand the potential harm your business could face and to ensure your cyber insurance policy is tailored to mirror those needs.
For further advice please contact us on 0800 038 9733 and we will be more than happy to assist and answer any concerns or questions you may have.