Is Your Business Protected Against Cyber Risks?
3rd June 2019 5 min read
At Miles Smith, it is our intention to provide our customers with key facts, knowledge and expertise about their whole insurance programme. This includes cyber cover, for which we are seeing an increased demand across the market.
This month we are going to remind you what cyber insurance is, how it protects your business and what you are protected against under both cyber cover and crime cover.
Cyber or Crime?
Firstly, it is important to determine the difference between cyber cover and crime cover.
Cyber cover includes the theft or corruption of valuable data, interruption to key systems and your customers, suppliers, or any third party suing for destruction, misuse or misappropriation of their data.
Crime cover includes the direct financial loss suffered as a result of employee dishonesty, theft and collusion or external crime including theft of funds and social engineering fraud.
For further details on Cyber v Crime, you can see our recent article here.
What can happen in a cyber-attack?
If you are the victim of a cyber-attack, your response will inevitably vary depending on whether or not you have a cyber insurance policy which includes a planned incident response. Examples of each are as follows:
A business that has a cyber policy
- When a cyber-attack has been identified, the business will contact its insurer which will instigate a coordinated incident response to the breach.
- The business will receive specialist support including forensic IT investigations, legal advice and customers and/or regulators will be notified.
- The business would be covered for any costs incurred, and it will also receive support to mitigate reputational damage.
A business that does not have a cyber policy
- When a cyber-attack has been identified, the business may contact either the police or its IT provider, both of whom would likely be unprepared and lacking in resource and expertise to deal with the breach.
- Unfortunately, the business would have to face the losses it incurs as a result of the breach, and it would have to pay for, or deal internally with any reputational damage.
Consequences of a cyber-attack
The National Cyber Security Centre calculated that the average cost of a security breach is £600k to £1.15m across all UK businesses, a scary figure. As a result of a cyber-attack you could:
• Lose valuable customer data
• Suffer damage to your business reputation
• Encounter regulatory issues
• Suffer interruption to your business activities
We cannot predict the exact cost of a business’s premium for a cyber policy without more information on the company. However, as an example, a construction company with a £10m turnover is likely to pay around £3k for cyber cover. If this company suffered a cyber-attack, its cyber policy would assist them and reduce the impact on the business. The average claim cost for this type of company is around £60k – £80k but could easily be higher, so the policy would save them a significant sum of money.
Compare this to a similar company which did not have a cyber policy, it would be at risk of having to cover the costs itself without the assistance of insurance and it could be out of business for days, weeks or even months trying to deal with the attack.
Get in touch with us
We have a team of experts at Miles Smith who can discuss your cyber requirements and arrange cover to protect you from this rapidly emerging risk.For more information, or to book an appointment, give us a call on 020 7977 4800 or email us at firstname.lastname@example.org
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