Guest blog: Insuring your business against cyber threats
BCR Associates, one of our supporters of Cyber Security Awareness Week (CSAW), discuss the importance of insuring your business against cyber threats.
As CSAW 2019 approaches, the threat of cyber breaches has never been more prevalent. At the start of this year, the Government reported that 40% of UK businesses had experienced a cyber security breach or attack over the previous 12 months. This is in part due to companies’ increasing reliance on storing and transferring data, and also through improved reporting on data breaches, as a result of the introduction of GDPR.
Cyber crime can take on a number of different guises, and businesses are finding themselves increasingly exposed as they introduce new technology platforms. It is heartening to hear that up to *£70 million of government funding, plus further investment from industry, is being offered to support computer hardware development, to ensure that equipment is more secure at its source.
Whilst these steps are extremely welcome in the battle against cybercrime, the fact is that at the present time, cyber attacks are on the increase, particularly amongst smaller organisations who inherently lack the resources and infrastructure to provide an effective deterrent.
A number of simple IT measures can be put in place to help protect organisations from cybercrime. However, this is only part of the solution, and organisations can often overlook the need for suitable insurance to mitigate the risk of a breach. Assuming that a general business liability policy will deal with the fall out should the worst happen is naïve; typically, these kinds of policies cover only injury and physical loss and very little relating to electronic damages and costs. Bespoke cyber liability insurance, however, can provide the precise protection your business needs to manage any risk.
So what kind of exposures are covered by a typical cyber policy?
- Data breaches– a result of increased online consumer spending placing more responsibility on companies protecting customers’ personal information
- Intellectual property rights– a wide variety of online presences, such as a website or on social media, can expose a company to libel, copyright or trademark infringement and defamation
- Damages to a third party system– for losses incurred by someone in receipt of an email containing a virus or faulty software from your company
- System failure– whilst physical damages to hardware as a result of a natural disaster, malicious activity or fire would be covered by an existing business liability policy, data or code loss would not
- Cyber extortion– hackers who sabotage your systems and demand money to restore them can cause a temporary loss of revenue and associated costs
- Business interruption– when computer systems are the backbone of your business operations, a disaster that cripples your ability to transmit data could cause you or a third party revenue loss
To ensure your business gets the right cover for its individual needs, it is important to consult a cyber insurance specialist who not only understands the various policies available, but can also understand your business’ specific areas of risk and is able to translate that into a tailored policy to meet your needs. A specialist will also ensure that any suggested policy is cost-effective and has the ability to adapt as your business grows.
As a cost and risk management consultancy based in Exeter, BCR Associates works with a range of businesses to mitigate risk and optimise cost efficiency. Cyber insurance is an area in which we see growing interest, and we have therefore forged strong partnerships with a panel of insurance experts who can help identify the risks to your business and guide you on the most suitable insurance policy for your specific needs.
If you would like to talk to us about the risks your business faces and insuring your business against cyber threats, give us a call on 03330 433 233.