Cybercrime has been on the rise over the past years, with many attacks having devastating effects on businesses. We take a look at ten reasons why your business should consider cyber insurance.
The average downtime for small-to-medium businesses following a cyber breach with a material outcome was around 3-5 days, with some affected for much longer. Even if your standard insurance covers for business interruption, system downtime usually isn’t included in this. Cyber insurance covers for any loss of profits incurred during downtime following a cyber-attack.
For every business, the data that you hold is a valuable asset, yet damage to or loss of data isn’t usually covered under business insurance. In the first quarter of 2019, it was found that around 30% of businesses suffered a loss of data or assets. Cybercriminals are targeting data, and not only will losing it affect your business’s day-to-day operations, but it could also land you in trouble if your data is leaked to the public. Cyber insurance covers the costs of data restoration and rectification in the event of an attack.
When companies lose sensitive data, they are legally obliged to follow recently introduced laws to let the people affected know; these are referred to as ‘breach notification laws’. While these vary across many countries, in the UK, businesses need to report a breach to the ICU if it poses a risk to the people involved, including their rights and freedoms. You should also let those affected know personally. The costs associated with and resulting from a breach notice can add up, but cyber insurance can help you with these.
Cybercrime is growing by the year and hackers are using increasingly sophisticated methods to infiltrate our systems. Even those using rudimentary techniques can successfully hack a business without the right measures in place. Business insurance does not cover for many of these techniques, including phishing scams and telephone hacking, meaning businesses require specialist cyber protection in order to be insured against these events.
If the public finds out that your business has been affected by a cyber-attack without having preventative measures in place, this could negatively alter their perception of you and result in less income generated in the oncoming months while you build back trust. With cyber insurance, you will be covered for seeking PR help to restore your reputation as well as the losses incurred from lost customers.
6. Social Media
If your employees post content over social media which is found to be slanderous, confidential or otherwise, your business could be held accountable. Cyber insurance covers your business against the costs related to any resulting claims.
Many small-to-medium businesses believe that they are less likely to be targeted by cybercriminals over larger corporations, however, this simply isn’t the case. Smaller businesses are actually the primary target of hackers, making up to 58% of all cyber-attack victims in 2018. It doesn’t matter whether you’re a small business or a larger enterprise, no-one is exempt from cybercrime.
8. Portable Devices
Even though portable devices are convenient, they are also easily misplaced and if they’re left in a public area or on transport, there’s no telling who will find and access the information the device holds. Additionally, hackers are developing viruses built specifically for these devices, leaving them more vulnerable than ever before. Cyber insurance can cover the costs associated with a lost, stolen or infected portable device.
9. Financial Penalties
If businesses lose credit card data, they could face huge financial penalties to meet the costs of investigation, payment card reissuance and any resulting fraud affecting customers. Even for small businesses, these costs can quickly escalate into hundreds of thousands of pounds; enough to close an ill-prepared business. Cyber insurance can help you meet these costs.
Should the data of your customers and suppliers become compromised, this could breach certain non-disclosure agreements you both have in place, triggering expensive damages and redress claims. With cyber insurance in place, you will have financial support with covering legal fees and any resulting compensation.
To find out more about the cyber insurance we can offer, call the team on 01483 726777.