Insuring against the damage caused by cyber attacks

In a world where high-profile data breaches have become the norm, cyber security has quickly become a top priority for organisations of all sizes, in all industries.

By Lisa Parker, director, West Craven Insurance Services

Cyber insurance is designed to protect businesses from internet-based risks and, more generally speaking, risks relating to information technology infrastructure and activities.

It can also help you to limit the damage caused by a successful attempt to access your business data.

If your business handles sensitive customer data such as names, addresses, or banking information, or you are reliant on computer systems to conduct your business, you should be protecting your data and especially your customer data as this could be compromised in the event of a security breach.

Most importantly, you need protection against the financial loss that you will suffer if your customers' personal identifiable information is lost, stolen or leaked.

From April 2018, the General Data Protection Regulation (GDPR) means a company can be fined up to €20m or four per cent of its turnover, whichever is the higher figure.

There are a number of ways you can help to protect your business from a cyber attack to help yourself and your customers, including understanding the risks, regular backups of data and keeping passwords updated and vigilance with emails.

Investing in cyber protection insurance is crucial and can help to protect your business against the risks of a cyber-attack and can even help to limit the damage caused by a successful attempt to access your business data.

Cyber protection insurance cover should be tailored to your business needs and offer dedicated cyber security against the latest digital threats, as well as support such as data recovery and cyber business interruption which can help you to get you back on your feet in the event of a cyber attack.

You may find that cyber security insurance is already an extension to an existing policy but in most cases this will only offer you limited protection. A stand-alone policy is usually best, will be more comprehensive and can often be bespoke to your organisation's needs.

To be able to properly consider different insurance options, firms need to understand their cyber risk exposures and how these match with the different policies being offered.

With the nature of cyber attacks constantly changing, and cyber criminals finding new and innovative ways to hack into businesses, it means that the cyber insurance landscape is also constantly changing. All of this may seem like a minefield to have to navigate through but if you ensure that you speak to the right people who provide the right advice for your business and can make sure that your policy is adaptive to your needs, then your cyber security insurance should help you sleep more easily.