Cyber insurance, also referred to as cyber liability insurance, protects your business from online security threats, hacks, or breaches. In an increasingly digital world, and with technology becoming more advanced by the day - cyber liability insurance is fast becoming a business essential.
While the Internet and online communication are crucial to the running of a modern-day business, they can also expose your company to significant risk. Indeed, whether your business relies on sophisticated computer networks or just sends out the occasional email – you’re susceptible to cyber crime.
The importance of cyber insurance
As a business, you are responsible for your own cyber security. This means taking adequate steps to protect yourself from cyber attacks through specialist software and regular back-ups.
As online risks and threats evolve with the emergence of new technologies, a dedicated cyber liability insurance policy is the only way to ensure your business is properly protected.
Investing in cyber liability insurance means that, if in the unfortunate event that you do fall victim to a cyber attack, you are not alone. Many insurance companies will cover first and third party financial and reputational costs to help you recover.
As high-profile companies have found to their cost, cyber crime is a very real danger. If your business has an online presence, you will be aware of the damage that could be caused by hacking – with website downtime potentially leading to days or weeks of lost revenue.
Even if your business doesn’t operate online, everyday computer use like downloading documents or receiving emails could see you contract a crippling virus that results in a loss of key data. Cyber liability insurance covers you for the costs associated with data or software recovery, and for financial damages incurred by online fraud.
What does cyber liability insurance cover?
Cyber insurance policies typically tend to cover:
- The cost of the investigation into the cyber attack
- The loss of income brought about due to business closure
- The cost of data recovery and restoration
- Depending upon the cyber insurance policy terms, the payment to cyber criminals after a ransomeware attack
- The cost of fines or compensation due to third parties in light of GDPR breaches
- The cost of public relations or crisis management services to assist with reputational damage
- The cost of IT and technical experts and equipment to help fix current breaches and prevent future attacks
What isn't covered by cyber insurance?
Though cyber liability insurance will often cover the bulk of costs incurred as a result of cybercrime, there are some it may not, such as:
- Upgrades: If your cyber attack was the result of a system or network upgrade, it might not be covered under your cyber liability insurance
- Future profits: Although most companies will cover reputational control costs, they will not pay out for any loss of future or potential profits
- Decreased valuation: In the event that your business becomes devalued in light of the cyber attack, it is unlikely that cyber liability insurance will cover you for this type of financial loss
Why do I need cyber insurance?
Cyber liability insurance is an essential part of business insurance. Even if your business has advanced antivirus and antimalware cyber technology installed, cyber criminals are using increasingly sophisticated tactics in order to gain access to well-protected computer networks.
It’s very easy to get caught off guard online; cyberattacks can happen in seconds as a result of opening one malicious email. If this happens and you don’t have cyber liability insurance, the consequences can be severe and financially crippling. It may even see the end of your business altogether.
Additionally, traditional business liability insurance policies are unable to cover you against certain online threats; as such, a cyber insurance policy is the only way to guarantee complete protection.
What is a cyber attack?
Cybercriminals can employ a number of tactics to gain access to private and personal information online. The main types of cybercrimes are:
- Hacking: This is an attempt to exploit or gain access to a computer system or private network. Once they have gained access, not only will the hacker have access to private and confidential information, but they might have control over the online network too.
- Phishing: Typically, phishing attacks involve deceptive emails or messages that trick the recipient into opening attachments or links that download malicious software or allows their keystrokes to be tracked. The hacker then gains the information they need to access company information.
- Malware: This is a type of malicious software that can install itself on your network (often through phishing or other scams) without your knowledge. Once the malware has been installed, cybercriminals can steal and spy on your online activity and data.
- Ransomware: This is another form of malware in that it gains access to your computer system. Ransomware then goes one step further and encrypts all the data in order for the cybercriminal to then demand a ransom in return for the data.
Cyber insurance protects against these online risks, covering your business for damage and losses caused by website hacking, ID fraud and malicious viruses. Only cyber liability insurance can protect against these threats – with traditional liability products simply unable to provide adequate cover.
Who needs cyber insurance?
It is strongly advised that all businesses, no matter how small, ensure they have adequate cyber insurance. Furthermore, even if only part of your business operates online or across a network, you should ensure that you have cyber liability insurance.
You may think that you won’t be targeted, but anyone with any aspect of their business online or uses a network, no matter how big or small, is vulnerable to a cyber threat.
Cyber insurance - FAQ's
How much does cyber insurance cost?
The cost of your cyber insurance policy will depend on a number of factors, such as the size of your business, your annual turnover, the type of data you hold, and the level of cyber protection you currently have in place.
Certain entities are more prone to cybercrime as they hold large amounts of valuable data. As a result, this can make the cost of cyber insurance higher.
The cost will also vary from provider to provider, which is why using QuoteRack to obtain a range of cyber liability insurance quotes allows you to compare cyber insurance prices.
How can I protect my business from a cyber attack?
The Government's National Cyber Security Centre has produced a helpful leaflet that we are happy to provide as a download: Common cyber attacks: reducing the impact.
Should I contact the police if I am a victim to a cyberattack?
Yes. As well as contacting your cyber insurance providers, you will need to contact the police. Cybercrime and hacking is a criminal offences, and the police will need to carry out an investigation.
Additionally, you will most likely need a crime reference number for the insurance policy.
Are there conditions to cyber insurance?
In order to be covered, you will need to make sure you abide by the terms and conditions of your cyber insurance policy. Most will have certain guidelines you will need to follow to make sure the insurance is valid.
For example, having adequate cybersecurity software installed may be a prerequisite for cyber liability insurance. This is because, without it, you become a potential target for a cyber attack. As a result, this increases your chances of needing to utilise your hacker insurance.
How can QuoteRack help me with Cyber Insurance?
With cyber crime a relatively new threat to businesses, cyber liability insurance can be difficult to find in the regular insurance market place. However, QuoteRack’s specialist brokers are on hand to provide a bespoke policy that provides the cover you need.
Hit the 'Get a Quote' button now to find a policy that works for you, and allows you to conduct your online business with full peace of mind.