What is cyber and data insurance?
Cyber and data insurance is designed to protect your business from exposures such as hacking, data theft and system infringement. Ransomware, password attacks and distributed denial of service attacks (DDOS) are becoming more and more common meaning there is an increasing need to protect against these risks beyond firewalls and anti-virus software. Cyber and data insurance can help to protect and support you if you fall victim to cybercrime.
Do I need cyber and data insurance?
If you have a website, hold personal data about your customers, suppliers or even employees, rely on computer systems as part of your day to day business, then you have a cyber and data exposure that you may wish to protect. Cyber insurance is designed to support your business if your systems are accessed online by malicious hackers and they cause damage. Whereas the data element covers the physical loss of the data should it be corrupted or lost whether electronically or not.
Cyber and data insurance can’t stop a hacker getting in, but it can provide crucial support if your data is compromised. The covers included can help you recover in terms of IT forensics to identify and eliminate any viruses on your systems, legal assistance to help guide you through the process of notifying the relevant authorities, and understanding your liabilities and PR representation to allow you to control the communications following a data breach as well as financial assistance for a loss of profits or the re-instatement of your data.
Why do I need cyber and data insurance?
Most businesses rely on some form of IT, whether its computers, mobiles or card machines to take payments. While the ‘Internet of Things’ (IOT) brings a wealth of new opportunities, with it comes a number of risks and threats, meaning the need for cyber protection has never been so important.
Whether your business is focused online or you’re subject to a payment card industry (PCI) merchant services agreement in your shop; cyber and data insurance is designed to support and protect you in the event of an infringement on your systems.
If you owned a building, you would arrange insurance to protect against fire, flood and a number of other perils that could damage or destroy it. This financial protection not only gives you peace of mind but more importantly responds when you need it most. Your computer systems and data storage units are no different which is why every business that relies on an IT infrastructure, however big or small, should arrange cyber insurance to future proof the organisation against the growing threat of cybercrime.
What does cyber and data insurance cover?
Working closely with Hiscox, a leading provider of cyber and data insurance, we arrange cover that gives comprehensive protection against a number of cyber and data risks, specifically designed for SME’s.
These covers work in conjunction to minimise disruption and help you manage and contain a situation following a breach with help and support from a number of experts. The following covers are included as standard:
If someone gains unauthorised access to the personal data you control, they could potentially sell or use that data for criminal activity.
Breach costs covers external computer forensic analysis that can help analyse and mitigate the damage caused by a breach. It also covers legal expenses incurred and the costs of notifying those affected, including any regulatory bodies such as the Information Commissioners Office (ICO).
So if your business fell victim to a hacker or you suspect that it may have, this element of cover can help by bringing in the experts to investigate and manage the initial stages of a breach on your behalf. It will also provide credit monitoring services following a breach to ensure the credit file of the person is monitored, for the proceeding twelve months, to ensure any fraudulent activity is picked up as soon as possible.
Cyber business interruption
When your systems have been compromised, there is no telling how long it could take to recover. And, when you’re running a business, time is money.
Business interruption insurance typically covers loss of income if you’re unable to trade following a property damage loss. Cyber business interruption insurance offers similar protection but specifically following a cyber incident while you’re unable to operate. As well as the standard cover for loss of income resulting from the cyber incident it will also cover loss of income as a result of the reputational damage the breach may cause. There is also cover included for increased costs of working that may be incurred.
When your systems are compromised by a hacker, damage and corruption often affects the computer systems and programs as well as the data held electronically. Whether it is stolen, copied or misused; this cover could help replace or repair the damage caused by the hacker to the hardware, software and data.
If a hacker holds your business to ransom, cyber and data insurance from Hiscox will look to help during this daunting time. They have expert knowledge and experience in this field and you'll receive assistance from a leading risk management consultancy firm to help manage and contain the situation.
Following any form of cyber or data breach there is an exposure to you to manage the situation and try to keep it under control. The Hiscox policy will give you access to an expert global risk consultancy who specialise in crisis containment from developing communication strategies to running a 24 hour seven day a week crisis press office. This will allow you to manage what could be a PR disaster with prompt and confident communications.
Compensation payments for breach of data can be extremely costly and regulatory charges can add up too. You could even incur legal charges in defending yourself, not to mention the cost of computer forensics throughout investigations. This is all covered under privacy protection as part of your cyber insurance cover.
With the rise of the internet it is becoming more and more important to keep up with your competitors and have some sort of presence online, this can be via your own website, email campaigns, social media, etc. If your systems or online accounts were hacked you could be exposed to a different set of issues such as defamation, breach of intellectual property or even transmission of a virus if a hacker alters the content of your communication. The Hiscox cyber and data insurance will provide media liability cover which will look to cover the costs, awards and settlements following legal action against you as a result of your online presence.
What level of cyber insurance do I need?
The amount of cyber liability insurance you need is generally dependent on the amount and type of IT infrastructure you have and data you hold. Businesses that are predominantly online, with a lot of software and larger amounts of personal and sensitive data will inevitably require higher levels of cover.
So it’s important to consider the main trading channels your business uses and the type of personal information you hold. What would be the impact if your systems were compromised and your data was stolen, and how long would it take you to get back up and running?
Think of all the costs involved. Firstly recovery of your systems and data, then there’s legal costs and reputational damage to consider as well as loss of income while you get back on your feet. There’s also the issue of informing all individuals whose data may have been exposed and regulatory bodies if needed. Damage control can be extremely costly so if you’re unsure then you should discuss this with your insurance broker.
A 2017 government survey found that 46% of all UK businesses identified at least one cyber security breach or attack in the last 12 months, rising to 66% among medium firms and 68% among large firms.
What are the risks of not having cyber insurance?
A report published by the Federation of Small Businesses (FSB) estimated that smaller firms are collectively attacked seven million times per year and cybercrime targeting SME’s cost approximately £5.26 billion a year.
While large scale attacks typically dominate the headlines, these figures clearly show that UK SME’s are a prime target for cyber criminals.
If your business was hit by ransomware, similar to the global attack that affected some NHS systems, how much disruption could this cause and how would you recover?
Having cyber insurance from a market leading insurer in this field can give you peace of mind, protection and essential support when you need it most. Call us today to discuss your cyber exposures and arrange you cyber liability insurance today.