Cyber crime continues to rise in terms of frequency, cost and complexity, affecting private individuals and businesses alike.
The COVID-19 pandemic, and the shift to home working, has seen cyber criminals increase their activity – the Hiscox Cyber Readiness Report 2021 stated the proportion of firms attacked has risen in the last 12 months from 38% to 43%, with many suffering multiple attacks. One in six firms said their survival was threatened by the attack.
Promisingly, the take-up of standalone cyber insurance cover has crept up from 1% to 27%. However, adoption is really only commonplace among experts and big companies (250+ employees), and 44% of micro-SMEs (<10 employees) say they have no intention of ever taking out insurance cover.
As a relatively new product, there are some common misconceptions which often result in small and medium-sized businesses opting not to purchase the valuable protection afforded by a cyber insurance policy. Listed below are some reasons why you should consider cyber insurance for your business, including some scenarios where you may incorrectly believe insurance cover is already in place…
5 Reasons to Consider Cyber Insurance for Your Business
Cybercrime is the fastest growing crime in the world
The widespread use of technology and the internet now means that businesses are exposed to the world’s criminals and vulnerable to attack at any time of the day or night. Cyber insurance is at the forefront of protecting against this new wave of crime, providing cover for a wide range of electronic perils, from wire transfer fraud to ransomware.
Technology systems are critical to operating your day-to-day business, but their downtime is not covered by standard business interruption insurance
Almost all businesses rely on computer systems and other technology to conduct their core business, from electronic point of sales software to back office systems. In the event that these systems are brought down, a traditional business interruption policy would likely not respond. Cyber insurance can provide cover for loss of income and extra expense associated with a cyber event.
Data is one of your most important assets yet it is not covered by standard property policies
Most businesses would agree that data or information is one of their most important assets and worth many times more than the physical equipment that it is stored upon. Yet most business owners do not realise that a standard property policy would not respond in the event that this data is damaged or destroyed. A cyber policy can provide comprehensive cover for data restoration and even re-creation in the event of a loss.
Complying with breach notification laws costs time and money
Breach notification laws are now commonplace and often require businesses that lose sensitive personal data to provide written notification to those individuals that were potentially affected or risk hefty fines and penalties. Cyber policies can provide cover for the costs associated with providing a breach notice even if it’s not legally required, and can also cover the associated regulatory fines and penalties.
A good cyber policy provides access to a wide range of incident response services
Responding to a cyber incident requires a range of specialists – from IT forensics firms to specialist PR agencies – that help deal with both the immediate aftermath as well as the longer term consequences of a cyber event. Small and medium sized businesses, in particular, are facing an uphill battle; not only are they increasingly being targeted by cybercriminals but they are also unlikely to have the range of required incident response specialists in-house. The good news is that cyber insurance can provide easy access to these services, helping companies more easily negotiate the changing face of crime.
For more information on how Adler Fairways can help you safeguard against the damaging effects of cyber crime, please contact us.