Cyber Security Insurance is part of a new range of products that have been developed by Insurers following the increased levels of Cyber Hacking and Cyber Crime events across the world.
Aimed at businesses who use Computer Systems in their daily activities, especially those who need to store personal data or transact business electronically, Cyber Liability Insurance is an essential and cost effective protection against this emerging criminal activity.
Hopefully this article will help businesses understand a little more about Cyber Risk and the innovative Cyber Liability Insurance products now available to protect them.
What is meant by ‘Cyber Risk’?
‘Cyber’ seems to be a term coined by the media to represent hacking of data, however ‘Cyber Risk’ has a much broader true definition covering any risk of financial loss or reputation damage arising from the possession or use of computer systems, web-presence or e-trading. Data security is an important issue, but Cyber Risks can also extend to Breach of Copyright and extortion by threat of cyber attack.
Key areas for businesses to consider when assessing their Cyber Risks are:
- Infrastructure vulnerabilities
- Firewall strength
- Training of employees
- Regulations in your territory and business sector
- Contracts with third parties providing data storage
- Use of portable devices and encryption policies
Preventing Cyber Attack – Cyber Risk Management
As with all business risk, Cyber Risks should be discovered, carefully considered and managed. This can be through Cyber Risk Management systems designed to eliminate, reduce and mitigate risks or by a mix of Cyber Risk Management and Cyber Insurance.
Cyber Insurance is an excellent method to transfer risk off your company balance sheet, but as with most Insurance Solutions, cost of premium is expensive unless a suitable risk management culture can be demonstrated.
Corporate Cyber Risk Management is available through several large Insurers either with or without a comprehensive insurance proposition.
For SME businesses you can:
- Check all operating system and data storage software is up to date
- Use a recognised Security Software platform to create a strong firewall and antivirus protection.
- Ensure your employees are trained and have knowledge of the risks
- Encrypt data in portable devices (including CD/DVD ROMs)
- Check contracts with suppliers accept liability for breaches on their premises
Cyber Security Insurance | Cyber Liability Insurance
The Insurance cover available in the market falls broadly into the following key areas:
Crisis Management provides expertise from Cyber Security specialists and PR consultants to mitigate the effects of a breach. Insured costs are met by Insurers
Cyber Liability insurance covers your legal liability to third parties following an event, for example a breach of copyright or being sued by customers following a breach of data security
Business Interruption Insurance, indemnifies you against your loss of revenue and costs of restoration of data following a Cyber Attack event
Regulatory Defence Insurance meets the costs of complying with any Regulatory action following a Cyber Attack
Cyber-extortion Insurance assists you with costs when a hacker steals data and demands a ransom to prevent publication