WHAT IS CYBER INSURANCE?

Cyber Insurance policies may help cover the financial losses that result from cyber attacks where a criminal or other malicious actor gains unauthorised access to a computer system usually to steal data or cause other damage. These policies may cover much of the costs involved in repairing any damage caused by such a breach.

The financial costs of a successful cyberattack may include the costs of recovering the targeted system, legal fees of dealing with its affects, forensic investigators customer credits or refunds, plus employing crisis and reputation managers.

Cyber insurance is vital because of the risk of monetary losses and because the theft of sensitive data, intellectual property and customer information can seriously damage a company’s reputation, which can result in loss of consumer trust, and be even more damaging in the long term.

With cyber attacks increasing, many organisations see the need to protect their own security with cyber insurance and require third parties with which they interact to also have coverage.

A cyber insurance policy, depending on its terms, may cover a business for much of the liability it has for damages suffered by others from a cyber attack that involves unauthorised use and access to a computer network, and its electronic data and software. It may also cover claims for unintentionally spreading a virus or malicious code, extortion resulting from stolen data and even an unintentional act or error by employees while performing their job.

The types of claims that may be covered by a cyber insurance policy can vary, but generally focus on three main areas:

• Liability suffered by the business because of an attack such as breach of privacy, damages lawsuits and the cost of regulatory defence requirements
• Internal Financial Losses resulting from extortion (ransomware, for example), expenses incurred in notifying customers and regulatory bodies, data recovery, the cost to business interruption and theft (of intellectual property or other valuable data)
• Emergency Incident Response which pays for the costs incurred in having a specialist team on site to deal with the consequences of a cyber attack

In today’s digital world, data is arguably one of the most important assets that a business and is also one of the most vulnerable. With the incidence and severity of cyber-attacks increasing, having cyber insurance in place may be a necessity when you consider the severe risks to your business’ financial viability without it.

If you have questions regarding cyber insurance for your business a Smart Business Insurance broker may be able to assist.