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What is Cyber insurance?

Cyber Insurance covers your losses in the event of a cyber breach or attack. Cover includes: inadvertent loss or release of customer personal information, cyber crime, cyber extortion/ransomware and business interruption due to a cyber event.

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Who needs Cyber insurance?

You may need Cyber insurance if your business is exposed to the following risks:

  • Cyber extortion and malware (viruses, ransomware, or publishing of stolen data).
  • Denial of service (disruption to operations).
  • Downstream attack (a compromise of your environment resulting in damages to others).
  • Hacking.
  • Insider and privilege misuse (unauthorised access and use of systems and data by employees and service providers).
  • Physical theft and loss (both devices and physical hard copy data).
  • Threats posed by third party access into a client environment.

How will Cyber insurance protect my business?

Your insurance policy will have its own specific list of insured events and exclusions. It is best to check with your insurer or the policy wording to confirm the details of your Cyber insurance policy.

Some commonly covered and not covered items include:

What is usually included?

  • Cyber liability
  • Crisis management and notification expenses
  • First party expenses
  • Loss of business income
  • Cyber extortion
  • Digital media liability

What is usually not included? 

  • Negligent business activities
  • Unlawful business activities
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How much cover do I need?

Sit back for a minute and think about the impact on your business if your website was taken offline?  Could your business survive the reputation damage, and the losses associated with a data breach?  

You should consider what your business requires:  

  • The type of risks to your business and the likely cost to manage and recover from a data breach.
  • The amount and nature of customer data you store and the security arrangements in place to protect that data.
  • Cover your suppliers, like cloud data storage suppliers, may have in place.

Could this happen to my business?

Malware

  • An employee clicks on a link in an email and malware is downloaded which encrypts all information throughout the organisation. A ransom demand is received requiring payment in 24 hours in exchange for the key to decrypt the information.

Personal information leakage

  • The incorrect attachment is accidentally mailed out to a third-party. The attachment contains personally identifiable information belonging to employees and customers.

Service attack

  • An online platform provider suffers a denial of service attack which results in their clients’ not being able to access their hosted portals for several hours.
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What happens if I under-insure or over-insure for cyber?

When under-insuring for Cyber it means that your business is at risk of having to cover the losses incurred from the profits of the business.

When over-insuring for Cyber your business will be covered in full in the event of a Cyber claim. This will also result in a higher premium.

Factors affecting your premium

Generally, the higher the level of risk that your business is exposed to, the higher the cost of the premium.

  • Amount of cover taken: the higher the amount of cover you take the higher your premium will be

Things to consider

  • Dependence on data and systems:
    • If access to these was removed, could you recover from scratch and if so how long would it take and at what cost?
  • Data that you store, process, and have access to:
    • What could the impact be if data were lost or compromised (own and 3rd party)?
  • If an incident occurred, who would you get to investigate and assist in recovering from the incident?
    • Are they equipped to conduct a proper forensic investigation?
    • What would it cost to conduct a forensic investigation?
    • What could the potential impact be of not investigating and managing an incident correctly?
  • What could liability and defence costs total?
  • Do you have coverage gaps in your existing cover?

Frequently asked questions

Why would my company be at risk for cyber-attacks?

All businesses are vulnerable to cyber-attacks. Hackers target big and small businesses, leaving their victims to pay out-of-pocket if they do not have cover for such losses.

Does any other liability policy provide cyber cover?

A cyber insurance policy provides the most comprehensive cover for system and data related risks.  A Professional Indemnity policy provides limited cover for third party data loss but only as it relates to the provision of professional services. A General Liability policy, as data is deemed intangible provides no cover. A Business Interruption policy requires physical damage to trigger the policy and incidents such as ransomware or hacking a server may reflect no physical damage.

Can I protect my business without purchasing cyber insurance cover?

There are many ways to mitigate the risk of cyber threats such as staff education, encryption, bring-your-own-device policies and password policies, however, even the most diligent businesses can be exposed to a cyber-attack.

Protect your business today.

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