Is Cyber Insurance a Necessity in the Modern World
Businesses have insurance for everything. Contents cover, personal and professional indemnity, and public liability. But what businesses often overlook is the growing and urgent need for cyber insurance. Cyber attacks on businesses are becoming more and more common and can have a devastating impact on how a business operates in the future whilst being potentially ruinous for business owners. In this article, we will look at the increasing need for cyber insurance and what to look for in your cyber insurance policy
What is a cyber attack?
A cyber attack is a malicious assault by criminals who use one or more computers to attack businesses’ computer information and data. They gain access to a computer’s network or networks and syphon the information from the hard drives. With this information, they can then disable the network, sell personal information, or blackmail the business. There are many different types of cyber attack, but the most common are phishing (fraudulent emails masquerading as legitimate which steal sensitive, persona information), Ransomware (Criminals install malicious software that holds your network hostage until you give into their demands), and password attacks (accessing a businesses or individuals account using their password and stealing all sensitive information.)
The average cost of a cyber attack
The average cost of a cyber attack on British businesses in 2021 was £8460 and over 80% of businesses experienced a cyber attack in the same year. However, the costs can be much more than just a financial hit. Losing your customer’s trust, damage to your business reputation, operational disruption, and loss of revenue are all hidden side effects of a data breach. These costs can not be counted in cash, and can take years to come back from.
How can cyber insurance protect you?
There are numerous ways in which cyber insurance can help protect you, your staff, and your business. Cyber insurance can help you cover the cost of notifying your clients that there has been a data breach. This is a legal requirement and the costs of doing so can add up. Your insurance policy will be able to help cover these costs, as well as any other costs incurred through fines, loss of earnings, and damaged equipment. Cyber insurance can also cover the costs of dealing with and defending yourself against the regulatory investigators.
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Ensure that your users only have access to the data and functions that they need to be able to perform their roles and jobs. In doing this, you are reducing the amount of information that any one user is able to access, reducing the amount of information that will be exposed in case of a breach
Password-related mistakes are the main cause of cyber breaches. Leaving passwords taped to screens, using the same password across a multitude of sites, and sharing them with colleagues are all huge red flags that your password security is poor. Using long passwords reduces the chance of hackers and criminals guessing your password, and implementing two-factor authorisation adds an extra layer of safety to your online accounts.
This includes making sure they have the right knowledge and tools to do their job, and also have security training so they can spot phishing emails, understand password security, and malware training. It may be time consuming, but it will save you money and time in the long run.
With cyber-attacks on the increase and more and more people moving to buying, working, and living online, then it is absolutely integral that cyber insurance is a part of your insurance portfolio. Making sure you are covered for any possible cyber attack that could hurt your growing business is one way of covering yourself and giving your customers peace of mind. If you’d like some advice from an experienced broker on risk management and considerations for your business, contact Dover Street Insurance Brokers. We’ve worked with businesses throughout County (optional), offering expert, unbiased advice and support. Get in touch by calling 0208 057 4130.