It can be easy to underestimate the impact a cyber event could have on your business but the fact is, a breach has the potential to be just as damaging to your business and livelihood as a fire or flood – arguably, more so.
With businesses being 5 times more likely to have a cyber claim than a fire claim in the UK* and 50% of businesses have reported they experienced some form of cyber security breach or attack in the past year**, this cover comes highly recommended. Here, we outline how cyber insurance can help bolster your business continuity.
From ransomware to social engineering scams, there’s a whole host of attacks criminals can hit you with to take control of your systems, funds or data. Attacks occur indiscriminately and can result in devastating setbacks, such as:
- Severe disruption to your ability to do business, leading to loss of revenue
- Systems disruption preventing the ability for you to work at all
- Blackmail (ransom demands) and significant financial loss – if you’ve ever wondered what a ransomware attack on your business might cost you, you can get a quick estimate using CFC’s Ransomware Calculator
- Contractual penalties due to delays in work
- Reputational damage and loss of customer trust
- Loss of intellectual property or confidential commercial information
- Theft and use of stolen customer details, including the likes of banking details
- Regulator involvement and legal action being taken against you.
These are just some of the ways a cyber crime event could impact your business, with potential long-term implications for you, any supplier of yours and of course, your customers.
So, what happens if your business falls victim to a cyber attack?
Without a cyber insurance policy in place, this question is extremely daunting.
How would you even start to get your systems back up and running, pay for any ransom or IT support necessary, deal with any PR that may follow, inform any impacted customers and suppliers, deal with any legal action taken against you (and pay for your legal defence), recover as a business, and find out what went wrong to prevent a similar incident happening again?
With the right insurance in place, you can have peace of mind that specialist help and support will be on hand to get you back up and running and rectify any damage, getting you back to your pre-incident state as quickly as possible, as well as covering the costs of doing so.
Cyber Incident Response
Responding to cyber incidents requires a great deal of technical expertise. Most cyber policies will therefore provide access to, and pay for the services of, a cyber security specialist who will provide incident response by carrying out forensic investigations, looking to get systems back up and running as swiftly as possible, recover any lost data, advise on and implement any necessary additional security features, and more.
Business Interruption
Whilst your business is out of action, policies can be arranged to include Business Interruption, protecting you against the losses you would suffer had you not taken out such insurance; this can allow you to continue to make any necessary payments to suppliers, pay staff salaries, rent, and the like. Business interruption cover you have under other, non-cyber specific policies, are unlikely to provide cover in the event of a cyber incident so this is something that you should take some time to review and consider.
Other Elements of Cyber Cover
Policies can also be arranged to provide cover for (please note this list is not exhaustive):
- Ransom demands – if you are being blackmailed to regain access to your systems or have data returned to you; payment of ransom will be subject to terms and conditions of the specific policy and circumstances.
- Managing PR exposure – providing you with access to experts who will assist in the management of messaging around the event to minimise reputational damage to your business.
- Privacy notification costs – most policies will cover mandatory notification to individuals, the payment card industry (PCI) and other regulators.
- Fines – those arising out of a breach of data protection legislation (where it is legally permissible to insure fines).
- Forensic investigation – to determine what went wrong and identify what and whose data has been exposed or put at risk.
Prevention of a cyber incident is better than the cure
Some policies will go further than protecting you in the event something goes wrong in that they provide proactive risk management support. They can go as far as providing access to IT specialists that will carry out vulnerability scanning of your systems, identifying any areas in which you may be exposed, and then advise you on any changes or additions you may want to think about to reduce your risk, in terms of security, policies and processes. With only 31% of businesses having undertaken cyber security risk assessments in the last year**, this support can be particularly valuable. If you have an IT company working with you already, these two parties can work together to establish how to minimise any risks identified.
How we can help
We appreciate cyber insurance can be a complex topic – there’s a lot to think about and consider. However, it is our role as an independent insurance broker to help you assess your risk and provide suitable options for your business, its assets and operations.
There are varying levels of cyber cover available, some of which we have outlined above, which we can make recommendations for but, ultimately, you will need to select the insurance policy you are comfortable will adequately protect your business and give you peace of mind that should you suffer a cyber incident, you have the right protection in place to support you.
To discuss cyber insurance in more depth or to obtain a no-obligation quotation, please speak with your dedicated contact if you are already a client. Alternatively, you can contact our team on 01653 609151 or at commercial@mcclarroninsurance.com.
*Insure TV Masterclass, Cyber resilience, 2024
