The threat of cyber-attacks is growing. It doesn’t matter what sector you’re in or which type of business you’re running, you may be susceptible. Cyber Insurance is a fundamental step towards enhancing your cyber protection. Cyber Insurance has changed dramatically over the years as cyber risks have. While it started out focusing on data breaches, nowadays most cyber security policies provide a more holistic approach to cyber insurance cover, in the event of any cyber incident. If you haven’t already thought about taking out a Cyber Insurance policy, now is the time, and we here at The Insurance Octopus can help you out with this, no end.
What is Cyber Insurance? Protecting Sensitive Customer Data & Business Operation
Dealing with the aftermath of a cyber security attack – which may include a ransomware attack, denial of service attack, a cyber breach or network security liability – can be complicated and stressful, not to mention time-consuming and potentially expensive. In its simplest terms, Cyber Insurance protects you from the financial implications that you may incur as a result of a cyber-attack or incident, even if cyber security controls fail. Cyber security practices can only go so far, and with the continuous growth and development of digital risks and malicious software, your cyber safety should be of paramount importance, with stringent cyber security defences in place and a level of cover that provides both financial protection and liability coverage. Investments in cyber security can help reduce loss of business income from all forms of ransomware, which is a major concern for organisations. Poor cyber security can be detrimental to your business’s future. With Cyber Insurance as part of your approach to cyber security, you’ll be better positioned to mitigate the impacts of a cyber security incident. This becomes an advantage of organisations, helping to mitigate ransomware trends, extortion payments and privacy breaches
The 2021 UK Cyber Security Breaches survey shows that the risk of data breaches may be higher than ever. This should come as no surprise due to the rise of remote working and its impact on IT security. As a result, there has been a corresponding increase in UK businesses taking out a Cyber Insurance policy, with 43% of businesses taking out some form of cyber insurance in 2021, up from 32% in 2020.
Why Do You Need Cyber Insurance?
- All businesses, including yours, are at risk
The digital world is constantly changing with cyber threats across varied industries growing exponentially and with cyber criminals targeting all types of businesses, from sole traders, restaurants and retail, through to eCommerce and hair and beauty salons. There has never been a more important time to keep your company safe, and your staff and customers protected.
In 2020, The Cyber Security Breaches survey revealed 46% of UK businesses suffered a cyber incident in the last 12 months. Most criminal activity is not targeted at a particular business size or industry; cyber criminals use sophisticated tools to search for system vulnerabilities, which means no business is immune to security threats.
2. People make mistakes
Most successful data breaches share one thing in common: human error. People can make mistakes in many ways, from failing to install software security updates in time to having weak passwords and providing sensitive information via phishing emails (you can read more about common cyber attackers here). Human error has consistently been identified as a major contributing factor to cybersecurity breaches. You and your employees aren’t always going to be able to spot the attempts of a cyber attack, and this is what cyber criminals rely on. In 2019, 90% of attacks seen by the Information Commissioner’s Office (ICO) were attributed to human error or a mistake rather than hardware or software vulnerabilities.
Whilst it’s impossible to eliminate human error, you can reduce such risks by increasing awareness of data security with real life examples of threats and providing employees continuous training to mitigate the risks.
3. A quick response can dramatically reduce the impact of a cyber-attack
The speed at which you react to a cyber attack can make a huge difference on the long-term effect on your business. The first hour after an attack is referred to as ‘the golden hour’, where immediate action is taken to dramatically reduce the impact of the event.
A slow response to cyber-attacks can leave businesses with critical vulnerabilities, and result in major data breaches and reputational damage. In 2018, statistics published by Redscan showed that the average time taken for businesses to identify a breach was 60 days and it took an additional 21 days on average to then report those breaches to the ICO.
Cyber Insurance helps your business recover faster. With Cyber Insurance you can receive assistance quickly from your insurer, which could be key to ensuring your company continues to operate with minimal business disruption.
4. Operations & reputations need protecting
Your business operates using data, so it’s crucial you keep that information secure. Being unable to access vital IT systems due to a cyber attack or data breach could result in significant business interruption and reputational damage to your business. Cyber attacks may not destroy a business itself operationally but also have great potential to cause a crisis for your reputation and destroy it if you don’t manage it properly. Most Cyber Insurance policies help to cover loss of revenue and include restoration costs – reimbursing the costs of repairing, replacing or restoring IT systems – as well as providing you access to a leading public relations firm to help you communicate with customers and various stakeholders in the aftermath of an incident.
5. Regulations are always evolving
With the accelerating pace of digitalisation, there is an increased focus on Data Protection Legislation. Some Cyber Liability Insurance policies may cover against your defence costs, regulatory fines and penalties, where insurable by law. The Information Commissioner’s Office (ICO) issued a record £42m in fines during the year 2020/21, a 1580% increase on the previous year, according to an analysis by international law firm RPC. This figure includes penalties imposed for two high-profile data breaches that resulted in millions of people’s personal data being compromised. Under the GDPR, the maximum fine the ICO can issue is £17.5m or 4% of a company’s annual global turnover (read more about this here).
Cyber security cover is not a ‘one size fits all’ procedure – tailor your Cyber Insurance policy with us.
Don’t wait until you have experienced a cyber attack to put measures in place. Be proactive and help protect your business now with a Cyber Insurance policy. The Insurance Octopus has access to a number of insurance markets and can help find you the most appropriate insurance cover for your business. From protecting you if you have had a business interruption from a data breach and the associated financial loss, to covering the costs of reputational damage, the aim of cyber insurance is to keep your business practices safe, and your company protected. With The Insurance Octopus you can tailor your cyber insurance cover to suit your requirements and the identified risks of your business.