What is Cyber Insurance?
Whether you have a small start-up or run a large corporation, cyber insurance can help you to remain on top of cyber threats as well as potentially mitigating the damage of the breach.
Cyber insurance helps to protect your business against a variety of digital risks by supporting financially if you experience a damaging network event such as a cyber-attack. Also known as cyber liability insurance, this commercial cover is designed to react quickly to malware attacks, hacking events and electronic data breaches by funding investigation and reimbursing losses.
Cyber insurance primarily protects businesses against business interruption and financial losses caused by cyber events, cybercrime, and privacy breaches.
A good cyber insurance policy will also provide access to technical resources including IT security experts, forensic investigators, lawyers and crisis communications specialists who will help you manage the situation and get back online as quickly as possible.
What are common cyber crimes?
Hacking refers to the partial or complete acquisition of a computer system or specific functions within it. There are several variations of this method, but the ultimate goal is to access important data.
Malware is a form of malicious software that has the ability to install itself within a system via phishing scams, making the system vulnerable and easier to access. Once the malware has been installed, the attacker is able to steal private data and spy on online activity.
Ransomware is a type of malware which attacks a computer system and encrypts data. The attacker will then make a ransom payment demand in exchange for the return of the data.
Do I need Cyber Insurance?
Any business, contractor or freelancer using the internet as part of their work could fall prey to cybercrime or face a data breach which insurance might help to resolve.
This means enterprises of all shapes and sizes could stand to benefit from cyber insurance. Nonetheless, certain professions may have a greater need than others.
If your business handles sensitive customer data such as names, addresses, or banking information, or you are reliant on computer systems to conduct your business, you should be protecting your customer data as this could be compromised in the event of a security breach.
Most importantly, you need protection against the financial loss that you will suffer if your customers' personal identifiable information (PII) is lost, stolen, or leaked. From April 2018, the General Data Protection Regulation (GDPR) means a company can be fined up to €20 million or 4% of its turnover (whichever is the higher figure).
What does Cyber Insurance include?
Protection against GDPR non-compliance claims
Compensation for loss of income due to a data breach
Help to recover your position where there’s reputational damage
Forensic investigations to aid data recovery, plus legal advice
Help notifying regulators after an attack
Repair or replacement if cyber events damage your equipment
Indemnity for losses incurred if your supplier faces a breach
Liability support if someone alleges you’ve transmitted a virus
What does Cyber Insurance cost?
There are two main costs when you take out a cyber insurance policy, these are:
Your insurance premium: this is either payable monthly or annually and forms the basic cost of your protection. This is the figure you’ll be quoted by insurers and depends on the cover you choose and the size and type of your business.
Your insurance excess: this is a lump sum you’ll need to pay if you make a claim. If you choose a small excess your insurance premium will usually be more expensive so weigh up how much you can afford to pay before settling on a figure.
What factors can affect the price of my Cyber Insurance premium?
The size of your business. A bigger business with a larger annual turnover is usually more expensive to insure than a sole trader for example.
Your industry sector. Certain industries are higher risk and more vulnerable to cyber crime, e.g. finance companies.
The data you hold. If you store a large amount of personal data or financial records then cyber cover could be more expensive.
The level of cover you choose. A basic policy offering limited protection is likely to be cheaper than a more comprehensive policy.