Essential protection and recovery from a cyber attack
A cyber insurance policy is also known as cyber security or cyber liability insurance. It helps your business to recover losses and associated costs resulting from large-scale breaches, business interruption, ransomware and other types of cyberattacks.
Combatting cybercriminal activity with Eric Alter
Cyber liability insurance can cover:
business interruption and lost revenue
data and hardware restoration and repair
data breach notification services
first and third-party costs
fraudulent representation and legal fees
incident preparation and response support
regulatory defence and penalties
Why do I need cyber insurance cover?
Whatever the size of your company, you probably depend on electronic systems to help run your business. It might be selling online, using office applications and email or in some cases, your whole business might be IT systems driven.
The myth that only big businesses suffer cyber-attacks is simply not true. In reality, businesses of all sizes are being targeted. Four in ten businesses (39%) and a quarter of charities (26%) report having cyber security breaches or attacks in the last 12 months.1 With the average cost of a cyber incident totalling £2,670.2 However, this cost becomes greater as the size of a business increases. So, no matter what size you are, it’s likely you’ll need a cyber insurance policy in place.
Some businesses believe that the data they hold isn’t worth stealing and that they’re unlikely to need protection. But, think what information you hold. Business details? Postal addresses? Named individuals and email addresses? Invoicing details? Supplier details? Employee data such as payroll and other HR records?
The truth is that this data is gold to cyber criminals and could be used for fraudulent activity. It's also easy to think that the only risk you face is from hackers. In reality, human error – such as losing a laptop or a mobile loaded with client data and passwords can result in public exposure. This can be just as destructive to your business. You might think your IT technicians are ultimately accountable, but everyone in your business has a responsibility to protect your business’s core assets.
Fortunately, cyber insurance cover and data protection can ensure you’re covered for more than just incidents caused by external forces. Your customers, your data, and even your reputation can also be covered for a range of internal as well as external eventualities.
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Cyber insurance FAQs
Unfortunately, small businesses can be easy targets for cyber-criminals. The more sensitive the information held in your system - the more likely you will be targeted. Cyber-crime is more sophisticated than ever.
Cyber liability insurance not only covers your liabilities following an attack, it also springs into action as soon as the incident occurs, helping you to reduce the damage.
The principal risks to your business can include:
- Spearfishing – fraudulent emails either aping staff through similar looking email accounts or by actually hacking in and impersonating people.
- Account interception/invoice fraud – transfer of funds into fraudster’s bank account/diversion of funds for legitimately purchased products/services.
- Contingent/third-party exposures – third-party system failure/third-party system compromise.
- Ransomware/political activism – lockdown of system until ransom is paid with significant system damage.
- Database theft – theft of client details/financial data.
- System disruption - leading to an inability to carry out core functions
Human error also caused 90% of cyber data breaches in 2019.1 Find out about the common employee mistakes that could result in a data breach.
If your business was to experience a cyber incident, either malicious or accidental, there will be an impact and consequences to your business. The impact could include:
- Non-physical – confidentiality issues/integrity issues/availability issues
- Physical – property damage/bodily injury.
Leading to the following consequences:
- Loss of income
- First-party costs
- Third-party liability
- Fines and penalties
- Extortion demands
- Negligence in services
- Shareholder litigation.
Statistically speaking, being hacked is more an issue of ‘when’ and not ‘if’. If you’re unfortunate enough to find your business on the receiving end of a hack or data breach, it can be easy to panic.
Be prepared and it will be much easier to navigate. Implementing the following steps could help lessen the impact on your business:
- Recognise and respond
- Data breach notification
- Make a claim
- Investigate your hack
- Protect against future cyberattacks