Traditional insurance policies were not designed for the new risks businesses face in a digital age. Businesses now face a new raft of exposures that can bring the potential for significant financial loss.
IT systems play an essential role in the running of any modern-day business, so it’s important to have strong security measures in place to strengthen your digital vulnerabilities. Cyber-attacks are becoming increasingly common and pose a threat to all types of sensitive business information, which is where cyber liability insurance comes in, helping to minimise the financial damage of any potential breach that could occur.
What is cyber liability insurance?
Cyber liability insurance gives your business financial cover if you have been the victim of a cyber-attack – for example, if your IT network is infected with malware or a data leak is caused by a breach in security. In today’s digital age, companies of all sizes are susceptible to cyber-attacks and the financial consequences can have a huge impact on your business, so having the right type of insurance in place could make all the difference.
Do I need cyber liability insurance?
Whether it’s handling sensitive customer data such as banking information or relying on IT systems to run your operations, every business is vulnerable to a security breach of some sort.
Smaller businesses may feel they are not as likely to be a target of a cyber-attack, however, this is not the case. In 2019 it was reported by the Federation of Small Businesses that small businesses in the UK were collectively subjected to almost 10,000 cyber-attacks a day, costing an estimated £4.5 billion each year.
UK GDPR also requires businesses to have robust systems in place to protect customer information, with large fines imposed if data is leaked and the company found to be at fault following an ICO investigation.
Horner Blakey will work closely with you to develop a bespoke insurance policy that ensures you have the right level of financial protection in place, helping to protect your business and your customers.
Before proceeding, always read the full details of your individual policy as terms and conditions will apply.
What does cyber liability insurance cover?
Because there are many types of cyber-attack that can affect your business, the insurance options are just as comprehensive. Some of the most common types include:
Business interruption insurance
A cyber-attack can cause huge disruption which forces you to stop operating for a certain period. Business interruption insurance can provide compensation if your business incurs financial losses as a result.
Data services insurance
If your business data has been compromised, you may need data services to restore or recreate lost information. This insurance can help pay for this and potentially any related investigation costs and fines.
Computer system insurance
The cost of repairing the damage caused by a cyber-attack can be extensive, and insurers can help to cover the cost of fixing and repairing these issues. This can include removing viruses and hiring professionals to offer advice for the future.
Cyber liability insurance can also provide cover for business data and IT incidents that are not caused by a malicious cyber-attack. This can be things such as a system failure (due to a natural disaster or power cut), copyright infringement and lost, damaged or stolen computer hardware.
What are the requirements for cyber liability insurance?
Some insurers may need you to meet certain criteria to qualify for cover. This ensures you have strong protection in place in the event of an attack, reducing the likelihood of you making a claim.
You may be required to provide a threat assessment, which informs insurers about your current vulnerabilities and what you are more likely to claim for. An insurance company may also ask you to demonstrate that you follow recommended best practices when it comes to cyber security to ensure you are doing everything possible to reduce the threat and impact of a cyber-attack.
Horner Blakey can advise you on any specific criteria that an insurer is requesting you meet, making the process much faster and easier to manage and complete.
Unfortunately, it is an area of increasing risk with the number of incidents growing year on year.
There are a range of products available to protect against these exposures. However, no two policies are the same with considerable variances in policy cover. Our recommendation is to seek skilled advice in finding what is right for you.
What Cyber Liability Protection Is Available?
Social Engineering Fraud, including mandate fraud.
Ransomware and Cyber Extortion, help, support, advice in managing the situation and payment of ransom.
Business interruption following a cyber incident
Damage by hacker, repair and restoration to systems, websites and data.
Costs following a data breach, including advice , investigation and regulatory notifications.
Crisis containment, mitigating repetitional damage
Privacy & Data protection, liability to third parties following a data breach, including regulatory investigation costa and fines where allowed.
Multimedia liability, accidental infringement of copyright and inadvertent libel via an electronic communication.