Cyber insurance helps to protect your business against losses caused by incidents that have affected your IT systems and networks.
If your business relies on any sort of technology, it can be exposed to a range of cyber-risks.
Cyber insurance – which is sometimes known as cyber liability insurance – compensates you for the effects of a digital incident or security breach, like a major cyber attack on your IT systems.
Cyber threats and digital incidents, such as system failures or security breaches, can have a big impact. Your business could experience considerable downtime, incur unforeseen costs, and you could lose valuable income and customer trust.
Cyber insurance is designed to protect your business from the costs, losses and business disruption caused by a digital incident.
A cyber incident, like data theft, can cause major disruption to your business. There can be costs to repair and recover your systems, and the incident can also mean financial losses to the business or even reputational damage.
You can buy business insurance policies with business interruption, or professional indemnity insurance that include some level of cover for cyber-risks.
But to give your business full protection, you’ll need to take out cyber-risk insurance if you:
Cyber-risk insurance covers the costs to your business that can result from something happening to your IT systems or networks. For example, a cyber attack could bring your website down or a digital incident could cause system failure or loss of customer information.
Insurance for cyber-risks usually also includes specialist help to manage and recover from a cyber incident.
There are several cyber risks your business can be exposed to, and cover for these falls into two categories:
This is cover for cyber risks that directly affect your own business:
This type of policy provides protection for assets that belong to others, like your customers:
There are several types of cybercrime that your business can be exposed to. The most common of these are:
It’s a good idea to protect your business as much as you can from cyber threats.
Anti-virus software can help to minimise the chances of your business falling victim to cybercrime. But at the speed technology and hackers are evolving, cyber security can’t totally protect you.
Results from the UK government’s Cyber Security Breaches Survey show that in 2020 almost half of businesses and a quarter of charities reported having a cyber breach or attack.
Some of these incidents had minimal impact, and businesses were able to recover quickly, but for others the negative impact of the breach or cyber attack was very costly.
Having cyber-risk insurance provides your business with an additional safety net to help make sure your business can cope and recover as quickly as possibly.
As well as taking out the right protection cover, it’s important to manage the cyber risks your business is exposed to. This can help your business to be proactive and resilient in the face of cybercrime.
If you don’t take reasonable care and precautions to protect your business and reduce your risk, this may invalidate any cyber-risk insurance claim.
There are many ways that you can help to put cyber security defences in place. These include:
With the increasing digitisation of our economy, digital technology is now touching almost every part of our everyday lives.
But alongside this digital growth is our increased exposure to cyber attacks, which are now viewed as the highest risk to national security, alongside terrorist attacks.
In response, the UK government has put in place a number of measures to help prevent and recover from cyber attacks, which include:
Cyber Essentials – a government scheme to help protect your business against a range of the most common cyber attacks. Certifying your business through the scheme helps you to address risks and put in defence measures to prevent the most common attacks.
National Cyber Security Centre (NCSC) – providing practical advice, guidance and support, the centre supports organisations, businesses, and the general public to help improve cyber security and respond to and recover from cyber security incidents.
Cyber Incident Response Scheme – this scheme helps organisations who are the victims of a significant cyber attack. The scheme certifies companies, who are approved by the NCSC, to carry out cyber incident response activities to help your organisation recover.