Cyber threats present a serious danger to businesses all over the world. As organisations become ever more interconnected, and the use of digital tools and data rises, so too does the importance of cyber security. Unfortunately, criminals are successfully targeting businesses all the time, in attacks that can prove devastating for unprepared companies.
Cyber attacks can cause untold damage for businesses, interrupting work and ruining esteemed reputations within days. But a robust insurance policy will protect businesses from the ruinous effects of large-scale cyber attacks, putting plans in place to relieve the financial burden of an attack, and get companies back up and running as quickly as possible.
Cyber insurance is a form of insurance policy which covers all manner of cyber threats, aiming to keep businesses safe from the damaging implications of cyber crime. This type of insurance is also sometimes referred to as cyber liability insurance.
There are several different aspects of cyber attacks that are covered by specialist cyber policies. Primarily, these include the effects of data breaches and the financial losses that occur as a direct result of an attack. Policies also provide financial support for companies that may face legal action as the result of a cyber attack, and they can cover the costs of any privacy investigations that may need to take place following a serious breach.
Today’s businesses are increasingly reliant on digital tools and communication methods, and the vast majority of companies now choose to store much of their sensitive data in a digital format. While this is great for productivity and cooperation, it also leaves far too many businesses open to the threat of cyber crime.
No matter how well protected a company’s systems are, and how strong its security defences happen to be, there’s always a small risk that an attack could take place. A UK government survey, the results of which were released in March 2020, found that “Almost half of businesses (46%) and a quarter of charities (26%)” reported cyber security breaches or attacks in the last 12 months.
These breaches come at a considerable cost. It’s been estimated that the average cost of such a breach is $3.86 million. And this rises quite substantially for particular industries, such as healthcare, where data tends to be more sensitive, and breaches therefore become more serious. The average cost of a breach in the healthcare sector is an eye watering $7.13 million.
Companies can put their all into strengthening their security processes, but even the best protected organisations will sometimes fall foul of a complex, targeted attack. So it’s always worth having a plan in place to deal with a cyber attack, should the worst happen.
There are a number of different ways in which cyber criminals could target a business. These range from attacks which prey on human error, such as phishing attacks, to more advanced cyber attacks such as SQL injections – a practice which sees attackers insert damaging code into apps or websites, with the aim of accessing a company’s data.
Malware is another serious threat, and this is something that companies should consider in their security defences and cyber insurance policies. This malicious software can be hugely damaging to businesses, particularly if the attack includes the use of ransomware.
Other widely used forms of cyber attack include denial-of-service, which sees cyber criminals bombard services with requests, rendering them unusable for customers, and man-in-the-middle attacks, which occur when a criminal infiltrates communication between a business and its customers, extracting important information relating to business transactions.
Most cyber insurance policies will cover the first and third party costs of a cyber attack. These costs tend to relate to the loss or damage of electronic systems, or the potential cost implications of these systems being stolen or compromised in some way. In some cases, cyber insurance policies will also foot the bill of ransoms demanded by attackers, to ensure companies are able to get back to business quickly.
There are specialist support services that companies can access through their insurers, and these often prove invaluable in the immediate aftermath of an attack. Services include specialist cyber forensic teams who can pinpoint how a breach happened, to ensure that it never happens again, and legal teams who offer support to companies facing legal action as a result of the attack.
The cost of public relations teams is also included in many cyber insurance policies, as businesses often need help limiting reputational damage in the days and weeks after an attack. This is an inclusion which is well worth considering if the reputational damage caused by a data breach could have a serious impact on your business.
The specific coverage included in cyber insurance policies varies according to the diverse needs of different organisations, and the range of cyber risks that these organisations face.
In some industries, such as healthcare, the potential damage of a data breach or other form of cyber attack is colossal. In these cases, businesses will usually choose more comprehensive cyber insurance policies for complete peace of mind. But for the vast majority of companies, a typical cyber insurance policy will provide everything needed to keep the company going in the wake of an attack.
The threat of cyber crime is very real, and as organisations become ever more reliant on digital processes, the potential damage that cyber criminals can cause is only increasing. However, there are many steps that companies can take to limit the impact that cyber threats can have, and ensure that cyber crime doesn’t put a stop to business.