Vital cover for all firms large and small
This is a recent and fast growing area of insurance which is grappling with new exposures created by technology.
All firms now need to consider cyber risk and appropriate risk mitigation strategies as part of their basic corporate governance. Cyber risk affects all businesses, and can seriously damage their viability. Experience in the United States has shown claims being brought against directors for failing to put cyber liability insurance in place, and therefore not taking sufficient steps to protect the assets of the business.
Technology is advancing at an alarming rate and business is more and more reliant on IT systems. Therefore any organisation or sole proprietor is at risk through their use of online networks and systems including exposure to hardware and software.
Cyber liability cover varies widely from policy to policy but can include the following:
- Data issues (loss, theft or corruption)
- Identification and containment of system issues (ie establishing what has been hacked and how to stop it)
- Regulatory requirements following data breach
- Defamation issues following outside interference in systems
- Loss of client monies
- Loss of own monies
- Ransom attacks
- Loss of profit to the business due to cyber-related interruptions
- Public relations consultancy to address and contain reputational damage
There is a misconception that it is only larger listed businesses which are prone to cyber-attack. In reality, 1 in 3 attacks target smaller organisations which make easier targets for hackers due to less robust IT security systems. Professional firms are particularly vulnerable to such attacks.
The average cost of an information security incident for small business is currently £60,000 with a reported £27 billion of cyber crime to the UK compared to £6.6 billion from fire risks.