Why all businesses regardless of size need cyber insurance

What is cyber insurance and what does it cover? 

Cyber insurance (or cyber liability insurance) is what will help your business in the unfortunate event of a cyber attack. Through possessing cyber insurance coverage, you can help minimise the often-disastrous effects of malicious attacks on your business through the repossession of any financial losses in the process. Some may argue that cyber insurance is not a necessity, however, with the increasing complexity and methodologies of cyber attacks, every organisation and individual is at risk of a malicious attack; therefore, through purchasing cyber insurance for your business, you have the peace of mind that you will be covered. Cyber attacks are no longer a case of ‘if’ but instead ‘when’.  

As a generalisation, cyber insurance policies tend to cover losses as a result of damage or theft of information and data from networks and IT infrastructure. Some examples of what is covered by cyber insurance policies include, but are not limited to:  

• Costs associated with recovering from a cyber attack (restoring systems). 
• Paying ransom demands. 
• Legal defence costs and other liable costs such as fines payable to the ICO (Information Commissioner’s Office). 
• Crisis management and public relations costs associated with notifying customers of a data breach.  

Who needs cyber insurance? 

It is recommended that any business that operates online and holds, uses and sends data should invest in cyber insurance. There is no longer a recommendation based on business size due to the increasingly advanced cyber threat landscape – meaning any business is now a potential victim of a cyber attack. The most calculated and professional cyber criminals target the larger organisations which now also leaves SMEs and small businesses with a target on their back for the more amateur yet equally effective cyber criminals. If your business operates digitally through websites, digital systems and more, it is advised to invest in cyber insurance. Due to the multitude of implications caused by a cyber attack from financial losses, operational down time and reputational damage, it is good practice to question whether your business could feasibly recover itself and absorb the costs. If the answer is no, invest in cyber insurance.  

How to obtain cyber insurance

There are a lot of factors to consider when applying for cyber insurance and if particular actions are not already implemented within your business’ operations, the application process can serve as a useful auditing task too. 

Things to consider when applying for cyber insurance:

• Risk assessments: It is important to undertake your own risk assessment and audit of the current cyber security landscape and particular threats your business faces such as data breaches or ransomware attacks. Cyber insurers will also often perform a risk assessment on your business to provide an accurate quotation and suitable policy. 

• Cost: Due to the nature of what cyber insurance covers and protects from business reputation to dealing with sometimes sensitive and personal information/data breaches, it comes as no surprise that there is often a high price tag associated with comprehensive cyber insurance coverage. However, it is a case of you pay for what you get in the instance you fall victim to a cyber attack. 

• Cyber Security Measures: As a result of the complex threat landscape, cyber insurance is increasingly challenging to obtain and unless organisations have appropriate cyber security measures in place, some cyber insurers will refuse to provide cover. It is best practice to implement appropriate cyber security solutions into your business before approaching cyber insurers. This provides two benefits of having your business protected; as a result, it is more robust against cyber threats initially and increases your likelihood of obtaining comprehensive cyber insurance.  

Prepare your business for cyber insurance

Although having cyber insurance is great, it is important to note that it will not protect your business from a cyber attack; therefore, it is extremely important to ensure you have robust cyber security safeguards in place for your business. Some of these defences include obtaining the Cyber Essentials or Cyber Essentials Plus accreditation. Cyber Essentials is a government backed scheme that sees organisations self-assess their current cyber security defence system, awarding the accreditation if the solutions in place are approved to protect your business and its data. To obtain Cyber Essentials Plus certification, a technical validation and hands-on cyber security implementation approach is required rather than self-assessment. Being a Cyber Essentials certified business has numerous benefits from displaying to your customer base that you take cyber security and their data usage seriously, to being eligible for cyber insurance discounts from some cyber insurance brokers. Furthermore, if your business operates or is looking to work on Government awarded contracts, having Cyber Essentials accreditation is often mandatory to secure these.  

Before looking to undergo a Cyber Essentials accreditation process, it is key to undertake an internal cyber security audit of your business to identify any gaps (or ways in for cyber criminals) and close these gaps through implementing suitable cyber security solutions. ITRM, operating for 25 years in the IT space, benefits from a highly skilled and knowledgeable team who can undertake this exercise with you and help scope out an improvement plan moving forward.  

CONTACT OUR TEAM FOR A SECURITY AUDIT QUOTATION

Additionally, with a plethora of cyber security solutions and package options to choose from, you can find the right defence for your business at the right level and cost to suit you. Our teams take the safety and longevity of our clients’ organisations seriously, working collaboratively and informatively. To further explore our cyber security services, click here.