Cyber-attacks Drive Growth of Cyber Insurance

Cyber risk is now a major threat to business. Companies increasingly face new exposures. With the operating environment many industries changing dramatically, as they become more digitally-connected.

Cyber-crimes include cyber-stalking, industrial espionage and information theft, fraud, extortion, identity theft, phishing scams and cyber terrorism. Cyber criminals use malware and viruses, computer and network hacking, denial of service attacks and fraudulent online scams to perpetrate their crimes. They find it relatively easy to access computers and networks inadequately protected by virus software or passwords. They will also directly steal laptops, computers and mobile devices and take advantage of computers that are left unattended.

Data privacy and protection is one of the key cyber risks and related legislation will toughen globally. More notifications of, and significant fines for, data breaches can be expected in future. Legislation has already become much tougher in the US, Honk Kong, Singapore and Australia, while in European Union is looking to agree pan-European data protection rules.

Too many organisations are leaving themselves vulnerable to cyber-crime based on a false sense of security, in view of the software they have in place which they believe is protecting them. Some industries have far higher risk profiles than others. At the very top of the tree are businesses that collect confidential information on clients, such as those in the banking, finance and health fields. However, any business that sells products to clients or charges them for services, and does so by collecting credit card and bank details, is at risk. But some organisations are better prepared to face that risk than others.

HOW COMPANIES CAN MINIMIZE CYBER RISK EXPOSURE

                                         CONTROL & MONITOR

•   Protect your computer with both a firewall and an anti-virus program. Keep your anti-virus program up-to-date and remember to renew your annual subscription.
• Back-up all important data. Viruses and malware can destroy vital information.
• Create a password of more than six characters with a combination of letters and numbers. Do not save the password on your computer or share it with others and change it regularly.
• Change your passwords every 6 months, different account must have different passwords.
• Email is the most likely route for viruses and hackers. Do not open any email attachments from people you do not know.
• Use the privacy settings on social networking sites to prevent malicious access to your personal information.

                                                          PROTECTION

The cyber insurance market is currently estimate to be worth around $2bn in premium worldwide.

However, the cyber security insurance market is expected to grow by double-digit figures year-on-year and could reach $20bn in the next 10 years.

Cyber insurance policies can be customized to suit a specific business’s needs. Areas of coverage may include:

• Breach of notice expenses. If your data is breached, you’re required by law to notify everyone affected, an expensive proposition. Not only will you need to send out notices, you’ll also have to set up a call center and provide credit monitoring services. You may also need to pay for an attorney and foot the bill to investigate what caused the breach.
• Damages and defense expenses. If any lawsuits result from a data security breach or an error or omission on your part, this aspect of coverage will protect you.
• Cyber blackmail. If a hacker decides to hold your website or database hostage, cyber extortion coverage will pay the ransom as well as the cost to track down the hacker. 
• Denial of service attacks. Some cyber insurance policies will cover the cost to restore your network along with any income lost as a result of the hack.
• Business interruption, data restoration and public relations. This part of the coverage will get you back up and running and pay the cost of professional crisis management to restore your company’s reputation.
• Service provider breach. If your data is stored in the cloud or with some other third party, this coverage will provide some protection if that source suffers a breach.

You don’t need to be a big business to be a victim.

If yours is a small business engaged in online or offline retail, distribution, professional services, legal services, tech or IT or manufacturing, you’ve got a big target on your back. Cyber-crime insurance can help reduce your exposure to risk. Ask your broker or insurer for more information on cyber insurance.