The Case For Cyber Insurance

In years gone by, wherever villains were found causing trouble, you could always trust that either Hong Kong Phooey, Danger Mouse, or Scooby Doo and his friends would be on the scene to sort things out.

But today’s cyber criminals aren’t balaclava-wearing baddies, or the janitor from the local school. Today, anyone with a computer and internet connection has the potential to commit cybercrimes against any business or individual, anywhere in the world.

Jeepers! That’s a scary thought.

Protecting your organisation from cybercrime has never been more important. With businesses increasingly turning to digital solutions, more sensitive data than ever before is being held on computers, in the cloud, or collected during online transactions. This information is extremely desirable and valuable to cyber criminals, who will use it to their benefit, or sell it on highly sophisticated black markets online.

Think you are safe as a small business? Think again!

A report from the Federation of Small Businesses estimates that small and medium businesses in the UK are attacked over 7 million times every year, and that 66% have been a victim of cybercrime over the past two years. It’s possible to have experienced a cyber security breach without even knowing about it.

Zoinks!

You might think that your business is covered by your existing insurance policies, but standard professional indemnity insurance and all-risk insurance policies don’t provide cover for cybercrimes and attacks.

Without cyber insurance, you and your business are solely responsible for any data breaches and information leaks, including loss of business, communication with customers, an investigation, lost information, retrieval, or crisis management. If any of your customers decide to sue you for jeopardizing their data, you would also be responsible for the court fees and settlements.

This is what happened to Sony in 2011, when names and other personal data from online gamers were stolen from its servers, along with a database of tens of thousands of customers. The attack prompted the Japanese company to shut down its PlayStation network and other services for a month. Unfortunately for Sony, their policy only covered physical property damage, not cyber damages, resulting in hard costs reaching $171M following the breach. These costs could have been offset by cyber insurance had Sony ensured it was covered in advance.

Specialist cyber insurance has been designed to keep up with the latest developments in technology and can cover first and third party assets, including:

• Loss or damage to digital assets, such as data or software
• Business interruption from network downtime
• Reputational damage
• The cost of customer notification expenses
• Cyber exhortation
• Costs of investigations and civil damages associated with security and privacy breaches
• Loss of third party data, including compensation to customers

We like to practice what we preach at Wood and Disney, which is why we have made sure we are insured against cyber-crime. Since cloud accounting is our specialism, it would be silly not to be protected against cyber-attacks and breaches.

We think Scooby and the gang would agree. Right, Scoob?

This article may be couched in humorous terms but the message is serious. If you agree this is an important message please like or share.