Independent cyber insurance brokers
Cyber insurance what does it cover?
Choosing to protect your business with cyber insurance is quickly becoming less of a choice and more of a necessity.
With cyber crime being the fastest growing type of crime in the world, there is an ever-increasing need for cyber insurance to help businesses both large and small to mitigate their risk exposure.
This is because standard property or even crime insurance policies simply do not cover the threat and damage caused by cyber attacks.
Research by the Government showed that the number of UK businesses that suffered a cyber attack doubled last year.
As many as 46% of companies suffered a cyber attack or breach of their computer systems in 2018 compared with just 24% the year before, according to figures from the Department for Culture, Media and Sport.
Whilst it’s often large-scale cyber attacks on big companies that make the news; TalkTalk, Three Mobile and Tesco Bank being such examples, small companies are also at risk and often, understandably, don’t have the funds to recover as quickly or as well from a cyber attack.
In fact, more than 30% of all cyber attacks across the globe have been aimed at businesses with less than 250 employees.
The Government also claims that the most serious breaches can end up costing businesses on average between £65,000 and £115,000.
Businesses operating in sectors such as accountancy, advertising, and marketing, construction, education, hospitality, hotels, law firms and manufacturing have been known to be affected by cyber crime although virtually any business can be vulnerable to a data breach or loss of vital business services.
Cyber insurance is vital if your business
- Holds sensitive customer data such as names and addresses or banking information.
- Is reliant on computer systems to conduct business.
- Has a website, or is subject to a payment card industry (PCI) merchant services agreement.
Data is probably one of the most important assets of any business but is not usually covered by standard property insurance policies
However, if someone hacks into your computer systems and steals some of your customers’ data, or just spreads a virus which makes your computer systems unusable, will you be able to cover all the associated costs of rebuilding those systems and networks that your business depends on?
Costs can include staff overtime and external specialist IT consultants and can easily run in thousands and tens of thousands of pounds.
Cyber crime insurance policies will cover you for all costs associated with recovering from a cyber attack including loss of profits during an attack.
Any business lives and dies by its reputation and when a business’ computer systems have been compromised, the business can run the risk of losing the trust of its customers way beyond any immediate financial loss.
So why not insure your reputation?
As a business owner, do you have, for example, the resources to pay for a public relations campaign to mitigate your customers, prospective customers, your market, or even the wider public’s concerns about any breach of your systems and theft of their data?
Cyber crime insurance policies can now pay for the advice and support of a specialist public relations firm to help you develop and implement a crisis management communications plan after such an attack.
These types of cyber insurance policies will also pay out for any claims arising from leaked information, defamatory statements or copyright infringement via the actions of employees on social media platforms.
Cyber policies will also cover any costs you incur to third parties through warranties and indemnities in relation to a breach of confidentiality including merchant service agreements and nondisclosure agreements.
Retailers, for example, are increasingly being held liable by credit card companies for forensic investigation costs, payment card reissuing costs and the actual fraud conducted on stolen cards under merchant service agreements.
These types of losses can run into hundreds of thousands of pounds for even small retailers.
Obviously, cyber insurance itself cannot prevent cyber attacks, but it will help your business to offset the costs of recovery in the aftermath of a hacker attack or other such cyber-based security breach.
How cyber insurance protects your business
When a significant security event does happen, there is a multitude of expenses that this incurs.
One of the main financial effects is the downtime that the company’s online network requires to solve the problem, which at the very least can seriously diminish your employees’ ability to communicate with each other.
In the worse case scenario, it could completely cripple your company’s ability to complete the tasks it needs to in order to continue functioning as a business.
There are also the significant costs involved in upgrading or replacing the breached security system.
If a hacker successfully targets your business then a complete security overhaul will be required to not only prevent the hacker from repeatedly attacking you but also to reassure your clients that the security breach won’t happen again.
Also bear in mind that there will be plenty of business clients for whom just one cyber security breach is too many, particularly if the breach results in your business requiring noticeable downtime to recover.
A cyber insurance policy in place shows your clients that you are ready and able to deal with such a problem.
Consider too the problem of third party data being stolen or illegally accessed during an attack on your business.
Such a breach could result in the need to make compensatory payments to those third parties.
Retail businesses are especially vulnerable to such consequences, as they are held liable for the loss of any of their customers’ credit card data.
A cyber insurance policy can typically cover the following, although, here at aba Group (leading cyber insurance providers), we tailor all our policies to each client so you only pay for the most relevant cover:
Breach costs: practical support in the event of a data breach (electronic or otherwise) including forensic investigations, legal advice, notifying customers or regulators, and offering support such as credit monitoring to affected customers.
Crisis containment: In the event of a data breach, prompt, confident communication is critical to help minimize the damage to a company’s reputation. We include crisis containment cover with a leading public relations firm who can provide expert support, from developing communication strategies to running a 24/7 crisis press office.
Cyber business interruption: Our policies provide compensation for loss of income, including when caused by damage to your reputation such as if a hacker targets your systems and prevents your business from earning revenue.
Cyber extortion: If a hacker tries to hold your business to ransom, we’ll protect you with any final ransom paid and we’ll also provide the services of a leading risk consultancy firm to help manage your particular situation.
Hacker damage: If you incur costs of repair, restoration or replacement following a hacker causing damage to your website(s), programmes or electronic data, our cyber insurance policies will reimburse your business.
Cyber insurance policies can also cover your business in the event you have to pay other parties such as in the following instances
Privacy protection: Any claims made against you for failing to keep customers’ personal data secure is covered by cyber insurance policies. Likewise, costs associated with investigations from regulatory organisations and civil penalties levied by such organisations are also covered.
Multimedia liability: If you mistakenly infringe someone’s copyright by using a picture online for example, or inadvertently libel a third party in an email or other electronic communication.
Additional covers can include:
Cyber crime: Any direct financial loss following an external hack into your company’s computer network. This could be theft of money, property, or your digital assets.
Telephone hacking: If you incur the costs of unauthorised telephone calls made by an external hacker following a breach of your computer network including traditional fixed-line telephony systems, as well as online systems such as VoIP, Skype, others.
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