Cyber insurance, A business essential?

Cyber insurance, A business essential?

Updated February 2019

Cyber insurance has rapidly become one of the most debated requirements for modern businesses. The increased use of the cloud for storing information, combined with the widespread adoption of more connected devices by the general population, has caused a surge in opportunities for cyber crime. It seems these opportunities aren’t being passed up either, with verified security breaches rising to nearly 125% of 2015 figures by November 2016.  Many breaches aren’t reported, as larger businesses don’t want to draw attention to their losses or publicly admit liability and small businesses don’t make the papers. For these and many reasons, having a good cyber insurance policy in place is vital for businesses of all sizes.

It’s often thought that high-tech companies, like software developers, systems analysts or IT providers, are the only organisations that really need cyber risk liability insurance. While it is true those businesses are especially at risk, any business or sole trader that stores customer emails, has a customer database (CRM system) or simply uses a computer network in day-to-day operations can be at risk from cyber attack and should invest in cyber liability insurance. It doesn’t matter if you’re an investment bank or a private landlord; the risks are real for everyone.

CHOOSING THE RIGHT CYBER INSURANCE POLICY

Cyber insurance is a fairly new offering that is sold under many different names, including cyber security insurance, network security insurance and privacy insurance. There is no standard form to which the industry adheres to underwrite cyber coverage, so it can be confusing for businesses to know which policy gives them the cover they require.

Cyber insurance coverage can include a variety of general risks, such as:

  • Data breach – Protection following an unintended release of private customer data
  • Data breach prevention – Helps with possible third-party expenses for identification and prevention of breaches
  • Security breach – Coverage for any customer damages incurred due to a network security breach
  • Cyber extortion – Covers the expense of paying extortionists to unlock your data or website
  • Regulatory expense – Helps lower the costs incurred to comply with breach notification laws

 

Specific cover can also be obtained for theft and fraud, forensic investigations, crisis management and credit or identity monitoring. Exclusions can include a whole host of hardware and software issues, as well as anything defined as an ‘act of war’. These exclusions can vary from provider to provider; so all individual policies should be carefully examined to understand which risks are covered.

Understanding the different features of your coverage can not only ensure you get the best value for money from your policy, it can also be the difference between having a claim approved or declined. The four most common reasons why cyber claims are refused include late or improper notification, a lack of understanding of coverage provided, exclusions within the language of the contract and not involving the network carrier early enough.

If you are involved in online or offline retail, any professional or legal services, distribution, manufacturing or technology, cyber crime insurance can help reduce your exposure and protect against potentially huge financial losses.

COMPREHENSIVE CYBER INSURANCE COVER FROM OBF

Cyber insurance should never be a substitute for good security practices. However, it can be a massive help to companies when navigating the risk transfer side of technology, which often strays into territories not covered by conventional property and liability coverage.

At OBF Insurance Group, we understand the cyber risk threats that face modern businesses and can offer a cyber insurance product that meets the specific needs of your organisation. Our dedicated team offers broker-to-broker facilities and access to domestic and UK markets. Whether you wish to limit your liability for data, require help with meeting and/or reducing administrative obligations or you need to manage your reputation and response costs, we can create a truly bespoke cyber insurance policy for your business. Plus, we offer options to cover multimedia liability as well as network interruptions.

If you wish to discuss possible scenarios or simply learn more about our cyber insurance policies and protection options, please contact us today.

 

Other useful cyber insurance news items:

The Top 3 Cyber Threats in 2017

4 simple reasons why you should have Cyber Insurance

How to Insure your Business against Cyber Security Risks