Without wishing to bang on about it (if you’ve already read Parts 1-3 of this series), any business, whatever its size, is exposed to risk of cyber attack if it makes use of IT at all – and what business doesn’t these days?
Remember these statistics? In 2014, 60% of small businesses in the UK experienced a cyber breach and the average cost was between £65,000 – £115,000.
Insurance against this, if it’s at all possible, would seem to be a sensible option, in the circumstances. Cyber insurance covers losses resulting from damage to IT systems and networks, including loss of information.
Cyber Insurance myths
- Other policies cover me anyway
While commercial property, professional indemnity or business interruption insurance MAY help in some cases, do you know what’s covered and for how much?
- It’s hugely expensive
Wrong – it can be as little as £100 a year depending on the size of your business and the level of cover
- If I have cyber insurance then I won’t need to be vigilant
…is rather like saying, ‘If I have car insurance then I can drive like an idiot.’ This is called a moral hazard in the world of insurance – with insurance there’s a reduced incentive to be prudent.
What to think about if you’re considering cyber insurance
A cyber audit would be a great idea, evaluating the possible dangers to yourself and to your customers or other people in your network (first and third party risks) and updating your security if needs be. You could also think about whether, in the event of a breach, you would need technical assistance, which could be covered by insurance.
There are packages to cover first or third party risks — or both.
First party insurance could cover damage or theft of money, digital assets, intellectual property and reputation, business interruption, the cost of notifying customers and of ‘cyber exhortation’ where money is demanded, or else…
Third party insurance could cover your customers’ assets, including the loss of their data, the cost of compensation, investigations, defence, damages and multi-media liability resulting from defamation, privacy breaches and negligence, incurred if you are responsible for a breach.
As always, there are a million and one policies out there, all with their own exclusions and small print.
Our best advice? Consult an expert before you sign anything!