Everyone is talking about Cyber Insurance these days. Quite rightly too – it’s an important subject. The modern world of technology creates a whole host of new risks to any business, big or small, and yet few insure these risks in our experience.
Insurance cover can come in various different shapes and sizes. Let’s see if we can see some wood through the trees.
What sort of things can cyber policies cover?
You could be liable for the cost of damage to others’ IT systems caused by hacking attacks or a virus which emanates from your IT system.
You could also be liable where personal data you hold (credit card information, customers’ names, addresses, dates of birth) falls into the wrong hands because of a security breach.
Costs of Managing Loss of Personal Data
What would you need to do in the event that personal data you hold falls into the wrong hands? You might be legally obligated to:
- Notify all parties affected by the security breach
- Set up credit monitoring and identity theft systems and helplines for those affected
- Carry out security audit and forensic investigation of your systems
You could be liable for something that you post on your website, or social media. Things like:
- Intellectual Property Rights Infringement
- Invasion of Privacy Rights
Network and Systems Damage
You can insure for the costs of repairing or replacing computer systems, and retrieving and replacing software and data which have been lost or damaged by malicious means – for example hackers, or virus.
Business Interruption and Loss of Income
Some businesses rely on their IT systems more than others. What would happen to your income if your systems were inoperable for a period of time? What if your sales systems were taken down at a busy time or your e-commerce website taken out of action by hackers? It is possible to insure this potential loss of income.
Cyber crime is rife and is a real threat to any business. You can insure against losses from fraudulent electronic transfer of funds, identity theft, cyber threats and extortion, phishing scams, and telephone hacking.
Cyber Insurance – The Market
There are a whole host of insurers offering Cyber cover, and wide range of policies available. The sections of cover offered vary tremendously with very few policies alike. For a business looking to buy cyber insurance it’s a minefield and not all insurance brokers necessarily have the knowledge to advise the client properly. So it’s important you speak to a broker who can advise you on the most appropriate cover, and source quotes accordingly.
Managing cyber risks
As well as putting adequate insurance in place, it is important for you to manage your own cyber risks as a business. This includes:
- Evaluating first and third party risks associated with the IT systems and networks in your business
- Assessing the potential events that could cause first or third party risks to materialise
- Analysing the controls that are currently in place and whether they need further improvement
For further information and advice speak to Mathew Rowles.
The Information contained within this document is general information only and believed to be correct at the time of publishing. It cannot be relied upon as advice or information in respect of any individual situation.