As a commercial insurance broker, we have been offering our clients a seamless service at competitive prices for years and are always looking for the best ways to add value for our clients. Cyber is rated the number one risk to organisations, and so we are working hard to make sure our clients are protected.
‘‘I don’t need cyber insurance’’
It would be too easy to end the conversation here, but we genuinely believe in the value of the product and the profundity of the risk. Let us rephrase that statement to ”Why do I need cyber insurance?” and explain…
It is easy to imagine a business premises going up in flames, but the damage a cyber incident can do can be far more destructive, and the consequences can be much further reaching than you imagine. This is why it is so important to get the right advice to understand how a cyber incident can affect your business.
The main reasons that cite from businesses without cyber cover are:
1. “Cyber is already covered by other lines of insurance anyway”
While there may be elements of cyber cover existing within traditional insurance policies, it tends to be only partial cover at best. Property policies were designed to cover your bricks and mortar, not your digital assets, professional liability policies generally don’t cover the first-party costs associated with responding to a cyber event. A standalone cyber policy is designed to cover these gaps, and importantly, comes with access to expert cyber claims handlers who are trained to get your business back on track with minimal disruption and financial impact.
It is so difficult to assess priority when you do not have the full range of facts or the correct advice at your disposal. This is why it is so important to speak to our cyber insurance specialists who can help you to understand the exposures and how these can affect your business.
2. “We don’t collect any sensitive data, so we don’t need cyber insurance”
You don’t need to be collecting sensitive data to have cyber exposure. In fact, any business that relies on computer systems to operate, whether for business critical activities or simply electronic banking has a very real cyber exposure. Two of the most common and costly sources of cyber claims are ransomware and funds transfer fraud. Funds transfer fraud is often carried out by criminals using fraudulent emails to divert legitimate fund transfers to their own accounts, while ransomware can cripple any organisation by encrypting or damaging business-critical computer systems. Neither of these types of incidents needs to involve a data breach, but both can lead to severe financial losses which are insurable under a cyber policy.
It does not take much imagination to see a future where some forms of cyber cover will become a legal requirement. As a business you can take pride in recognising these trends early and showing your customers and supply chain that you take these threats seriously.
3. “We invest in IT security and outsource all of our IT so don’t have the exposure”
Investing in IT security is a great precautionary measure, but hackers can often bypass security measures and exploit human error. In fact, 88% of cyber attacks are caused by human error. Cyber insurance is there to act as a valuable safety net in the event that your IT security fails to prevent an attack. Likewise, when a business puts locks on their doors to reduce the risk of theft or install sprinkler systems to mitigate the risk of fire, they will still usually purchase property damage insurance in case those precautionary measures fail.
Unfortunately, using a third party for IT doesn’t eliminate your exposure either. If you outsource your data storage to a third party and that third party is breached, you will still likely be responsible for notifying affected individuals and dealing with subsequent regulatory actions. Most third-party technology service providers have standard terms of service that limit their liability in the event that a breach or system outage causes financial harm to one of their clients.
4. “Cyber insurance is too expensive”
This is a tricky one to address. Particularly in the challenging economic times we face. However, when looking at the cost of risk management versus the potential costs of an incident the picture becomes clearer. Options for mitigating your risk cost less than you might imagine and could prevent your business from being stopped in its tracks. The sad fact is 60% of SMEs fold within 6 months of a cyber incident.
The cost of cyber insurance is influenced by the increased severity of cyber claims and the innovative risk management services that come with the policy, making cyber insurance one of the best investments any business can make. There’s the business interruption loss to consider, as well as remediation and recovery expenses, legal fees, regulatory harm, and so on. It’s no surprise cyber risk is a top business exposure – with cyber insurance key in mitigating this risk. More than offering cover for financial loss, cyber insurance gives you instant access to a wide range of technical specialists- experts in helping businesses quickly recover from cyber events.
As an independent insurance broker with experts in cyber, we are here when you need us. Contact our team today for a free, no-obligation insurance review.
“Highly recommend John Phillips. We’ve recently had to claim on our insurance due to the loss of our websites and the whole process has been SO efficient. Every company should have cyber insurance.” – Claire Maddox