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Is your business protected against cyber security breaches?

15 May 2017
Wedding Insurance Group

Like many of you over the weekend I watched the news with great interest and could not believe the size and scale of the chaos that followed the cyber attacks on the NHS and other businesses at home and abroad. Whilst this is still fresh in our minds, I think it is worth exploring the topic of cyber and data insurance as after all if it can happen to the NHS, it can happen to anyone.

90% of large businesses and 74% of small businesses had a security breach over the previous year, with the average breach costing small businesses £75k (source: Information Security Breaches Survey).

What is Cyber and Data Insurance?

Insurance to protect the data and computer systems of your business.

Why is it necessary?

Businesses today are heavily reliant on technology. Whilst there are many advantages to this, there are enhanced risks of suffering a loss related to problems with your IT systems, or from handling sensitive customer data. This can lead to lost income, reputational damage, and legal and regulatory costs.

I’m a small company, do I need to buy insurance?

There’s a black market where records are sold and bought, and hackers are only getting savvier. With up to 74% of small businesses and 90% of large organisations suffering a data breach the risks are real.

My IT provider is confident we are secure, do I need a policy?

The NHS, Carphone Warehouse, TalkTalk and many other large corporations like them have entire departments devoted to IT security, and they still suffered a data breach. A simple oversight like not updating software, not setting appropriate user authentication procedures for third party vendors, losing an unencrypted laptop, or a rogue employee with malicious intent, can all lead to a breach.

My data is stored in the cloud, so liability rests with them?

Not exactly. It would be in your best interest to carefully review your cloud contracts with legal counsel. Even if the risk is reduced, the liability may still fall on the shoulders of the insured. You can outsource the service but not the responsibility.

What is encryption?

It’s the process of encoding information so that only authorised parties can read it.

I have a password, is that the same as encryption?

No. Encryption is the process of scrambling the data on a hard disk so it is unusable unless accessed with a decryption key. Only using password protection means that a hacker could bypass the password to access intact data that hasn’t been encrypted.

What does Cyber and Data Insurance Cover?

Breach costs

In the event of a data breach (electronic or otherwise) you will require the assistance of forensic investigators, legal advice, notifying customers or regulators, and offering support such as credit monitoring to affected customers

Crisis containment

Following a data breach, prompt, confident communication is critical to help minimise the damage to your reputation. Crisis containment cover will provide expert support, from developing communication strategies to running a 24/7 crisis press office.

Cyber business interruption

Compensation for your lost income, including where caused by damage to your reputation, if a hacker targets your systems and prevents your business from earning revenue.

Cyber extortion

Protects your business if a hacker attempts to hold your business to ransom. Covers any final ransom paid, as well as the services of a leading risk consultancy firm to help manage the situation.

Hacker damage

Reimburses you for the costs of repair, restoration or replacement if a hacker causes damage to your websites, programmes or electronic data.

Other Amounts you may be liable to pay to other parties

Privacy protection

Support in defending and settling claims made against you for failing to keep customers’ personal data secure. Also pays the costs associated with regulatory investigations and settling civil penalties levied by regulators where allowed.

Multimedia liability

Support 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.

If you would like a quotation to protect your business do get in touch on 0121 550 2380. In the meantime, for more information and guidance on cyber and data insurance, view this useful video guide:

Andy

Is your business protected against cyber security breaches?

Andrew Helliwell

Underwriter & Broker


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