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Why Every Business Should Have Cyber Insurance

October 10, 2018

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Written By Callum Watkins, Marketing Executive at 1st Choice Insurance

Each day technology advances and transforms the way we live. As consumers, we are beginning the spend more and more money online. In fact, according to a recent report commissioned by the BBC, the UK tops the charts for the most money spent online per household.

In recent years, online crime has boomed as more and more money and valuable data is transferred online. Expert hackers and online criminal gangs can intercept this data, transfer funds and even blackmail businesses for ransom. This blog will outline the growth of online crime, the risks involved, and why all business must now make cyber insurance, a priority.

 

What does ‘cyber’ mean?

According to the Cambridge Dictionary, the term cyber means ‘involving, using, or relating to computers, especially the internet’. Let’s face it, our lives are now moving online. We use smartphones for an average of 88.5 hours per month. Most companies operate fully on computers, as paper has now become a thing of the past. The huge shift to computers and online devices over the last decade explains the huge buzz around this new term ‘cyber’. It might seem complicated, but cyber is just a fancy word for digital and online.

 

Why is cybercrime on the rise?

The main reason crime has been on the rise is technology has fundamentally changed the way we manage our assets. Back when our money and data assets were on paper, and letters were sent in the post, there was less opportunity for information to be intercepted by criminals. Whereas today's digital assets, such as email and online passwords, are now accessible by anyone in the world who has the correct knowledge.

This has fundamentally changed the level of risk, as valuable information, data, and even our bank accounts are more accessible than ever. Where there is access, there is someone trying to gain it. Therefore, cybercrime has risen year on year. In fact, ComputerWeekly found that in 2017, cybercrime increased by 63%.

 

The types of cybercrime

There are many ways that cybercriminal gangs try and access our data. Whilst there may be hundreds of different tactics out there, 99% of cybercrimes fall into one of 3 categories.

- Theft of funds: Straightforward theft from a individuals or company bank accounts is by far the most common form of cybercrime. Most criminals are motivated by the financial reward.

- Theft of data: Identity theft has reached an all-time high in the UK. Data is valuable, and with access to names, emails, purchase history and other consumer information, selling data has become big business.

- Damage to digital assets: Companies rely heavily on digital channels to operate. From payments systems to CRM databases, or even their websites. Hackers know the value businesses place on their digital assets and use this value to blackmail business owners into paying ransoms.

 

The need for cyber insurance

With the increased risk of cybercrime, cyber insurance is becoming a must have policy. Cyber insurance helps businesses reclaim the finical losses that can occur from cybercrime. It also gives businesses access to cybercrime professionals who are better able to deal with cyber-attacks than in-house IT teams.

 

The 6 main features of a cyber insurance policy

-  Incident Response: This will cover the real costs involved in responding to a cyber-attack in real time. This could involve IT support, legal advice and the cost of having to notify any individuals who have been affected by the incident.

- Cyber Extortion: This covers the costs involved with dealing with fraudsters attempting to extort money from a business via cyber-attack, or threats to destroy data after a system has already been compromised.

- System Damage: This covers the costs of restoring a business’s data and digital assets following an attack. This could mean replacing computers, new software’s and repairing damaged programmes. This cover is often vital for getting a business back on its feet.

- System Business Interruption: This cover aims to reimburse a business with the profits they have lost because of dealing with a cyber-attack or event.

- Network security and privacy liability: This covers third party claims arising from a cyber event. Maybe an attack has transferred harmful malware to a third party’s system or the attack has meant you have been unable to protect individual’s data.

- Regulatory Fines: This covers any costs that may arise from certain fine and regularity bodies. Taking GDPR as an example, if you lost customer data, this policy would cover any fines from the Information Commissioners Office.

- Media liability: This covers any third-party claims arising out of defamation or infringement of intellectual property rights.

 

Get a cyber insurance quote

We work with the biggest and best brands in the UK who offer a wide range of cyber insurance policies to protect each business. Our in-house team of insurance experts will talk to you to understand the needs of your business, and then we will find the most suitable policy for you. Best of all, we compare and find the best deal online, saving you time, hassle, and money. Request a call back from our team of experts HERE.

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