The internet – a modern day necessity for businesses and individuals – has given rise to a cyber-crime industry that is expected to cost the world $6 trillion by 2021 . Insurers have been slow to react to the growing threats created by the internet, but cyber insurance is now readily available to help both businesses and individuals mitigate these risks.
Have you ever received an email from someone pretending to be someone they’re not? Perhaps from the HMRC, or a well-known tech company sending you a purchase receipt for something you have not brought – well this is known as ‘Phishing’ and it’s just one way cybercriminals can breach firewalls and get hold of your personal data.
Cybercriminals are seemingly creative and resourceful in finding weaknesses in IT and network infrastructures. Therefore, as insurance brokers, we recommend that businesses and individuals take out appropriate cyber insurance for when software security fails.
Cyber Insurance for businesses
Most businesses purchase their cyber insurance under wider commercial policies, but for larger companies with bigger exposures, standalone policies underwritten by the Lloyds insurance market is often more appropriate. Here are some of the covers offered under a business cyber policy:
- Ransomware – Cyber extortion – We will protect you if a hacker tries to hold your business to ransom by covering the ransom you have paid, as well as the services of a leading risk consultancy firm to help manage the situation.
- Data Breach/Crisis Management cover – For example, expenses related to the management of an incident, the investigation, the remediation, data subject notification, call management, credit checking for data subjects, legal costs, court attendance and regulatory fines.
- Cyber business interruption – compensation for loss of income, including where caused by damage to your reputation, if a hacker targets your systems and prevents your business from earning revenue.
- Hacker damage – We will reimburse you for the costs of repair, restoration or replacement if a hacker causes damage to your websites, programs or electronic data.
Cyber Insurance for Individuals
Unlike commercial cyber insurance, personal cyber insurance is a relatively new product in the market place, and for now the cover seems to only be readily accessible through comprehensive home insurance policies as add-on cover. Unfortunately, this means for those that purchase their insurance online or direct with an insurer, rather than through a broker, there is no easy access to cyber insurance yet. Although, it’s likely that all home insurance policies will offer some cyber cover at some stage in the near future.
Personal cyber insurance largely mirrors that of its business counterpart. Although, with this form of protection being a relatively new addition to the insurance market, insurers are limiting their exposure to a maximum limit of circa £100,000.
Having good software systems in place and being internet security savvy is always the first step to protection against cyber-attacks, but sadly cybercriminals always seem to find gaps and opportunities and so cyber insurance is a good safeguard to protect assets and liabilities.
For more information about cyber insurance and how to protect yourself against online thefts we recommend that you speak to your insurance broker.
Written by: Josh Robinson, Portfolio Associate, firstname.lastname@example.org