What is cyber insurance?
Almost all modern businesses trade online to some extent and often face their most significant risks in this evolving digital world – threats that could cripple them financially and reputationally.
Cyber insurance protects firms with a digital and online presence from potential risks and internet-based threats relating to the IT infrastructure. These threats can range from data breaches to cybercrime.
Everyday activities, such as data storage, sending emails or posting on social media, can expose you to a cyberattack. Cybercrime worldwide is continuously evolving at an increased rate year on year. Businesses of all shapes and sizes across the globe must consider their exposures and protect themselves against cybercrime. A comprehensive Cyber Insurance policy can help you to do this.
What does cyber insurance cover?
There are three main types of cyber liability insurance cover:
First Party Cover – The first party sections cover the business’s own financial loss. This is defined as any actual or suspected unauthorised system access, electronic attack or privacy breach.
Typical coverage for First Party losses:
- Incident Response – general costs of responding to a cyber incident. For example, security and forensic support, legal advice for a data security breach and costs involved with notifying the regulators and any individual(s) who have had their data stolen.
- Cyber Extortion – an attempt made by fraudsters to extort money from your business. This may be by threatening to destroy or release data. The policy will cover the cost of the ransom demand and provide support with negotiations.
- System Damage – repair and restoration of damaged systems such as data and applications.
- System Business Interruption – for loss of profits and any increased costs of working as a result of a cyber incident causing the business to be inoperable.
Third Party Cover – The third party sections cover for liability against the business arising out of a cyber event.
Typical coverage for Third Party losses:
- Network Security and Privacy Liability – third party claims from your clients arising out of a cyber event, to cover legal defence costs and any subsequent damages. Examples of this could be transmitting harmful malware to a third party’s system or failing to prevent an individual’s data from being breached.
- Media Liability – third party claims arising out of defamation or infringement of intellectual property rights. An example of an infringement of intellectual property rights could be where a trademark or patent has been violated, exploited or copied.
Cybercrime – Theft of funds as opposed to data by extortion, electronic compromise and social engineering.
Typical coverage for Cybercrime losses:
- Theft of funds – including funds held in escrow (assets of a third-party held in a bank account held by the insured) and theft of personal funds (directors & officers loss of personal funds due to compromised network security via a third-party. ) The policy will cover the loss of funds.
- Extortion – an attempt made by fraudsters to extort money from your business. This may be by threatening to destroy or release data.
- Push payment fraud – fraudulently impersonating a member of staff, customer or supplier to manipulate the transfer of money. For example, the interception and manipulation of a supplier invoice meaning the payment is unknowingly sent to the fraudsters account. Again the policy provides cover for the loss of funds.
Why do I need cyber insurance?
- Protect your customers and their data
- Protect your Intellectual Property Rights
- Protection for your Employees working remotely
- Protect the reputation of your business
- Prevent fraud
- Prevent theft of funds
- Protect against emerging threats