Cyber Liability Insurance
What Is Cyber Liability Insurance?
The term ‘cyber insurance’ or its more official name Cyber Liability Insurance, is highly misleading. It has nothing to do with Cyber Men attacking the Earth and Dr Who leaping to our defence. A far better term for it would be Data Protection and Remedial Cost insurance because that is a far better description of what Cyber Liability Insurance is and does.
This kind of insurance protects your data, whether it’s in paper or electronic form and also protects you from the consequences of it being shared inadvertently with the wrong people (the GDPR factor, but more of that in a moment). However, Cyber Liability Insurance does far more than that. For example, I.T. forensic geeks are now the most expensive type of Computer geeks in the UK and can often charge over a £1,000 per day for their time in fixing IT systems that have become infected.
Computer systems can become infected through a variety of ways. You might be hacked or have your website taken down by a competitor (yes, it does happen) but far more likely is that you or one of your staff will click on something which you shouldn’t have done and that lets the bad guys in.
Only A Third Of Cyber Liability Insurance Claims Are From Hacking
A recent survey by a leading insurer discovered that out of all the ‘cyber’ claims they had dealt with over the past 12 months only 1/3 of claims came from hacking. The vast majority of claims came from other causes, the primary one being unintended disclosure.
How Cyber Liability Insurance Can Help With The ICO
An example of unintended disclosure happened to one of our own clients. They left some important papers on the doorstep of a client because he wasn’t at home and the papers wouldn’t fit through the letterbox. The papers were stolen and the Information Commissioners Office (ICO) had to be told, but fortunately no action was taken against the business concerned. This is the case for most businesses who hold Cyber Liability Insurance because the insurance company knows how to approach the ICO and they can afford to employ legal and PR specialists to ensure the matter is dealt with as smoothly as possible and to the ICO’s satisfaction.
You don’t have to look far to see what happens when an organisation has a breach and doesn’t handle it properly. Take Morrison’s for example, they had a rogue employee leak personal details and when it went to court, even the judge said if they had held Cyber Insurance then it would have helped deal with the consequences.
Cyber Liability Insurance Is A Requirement Of Some Contracts
Cyber Liability Insurance is changing rapidly and it is quickly becoming an essential element of protection for most if not all businesses. Imagine what would happen if your system was hacked and you couldn’t access your payroll or accounting records or customer database. It would be havoc and yes of course, virtually every business has anti-virus software, but that’s like a goalkeeper facing the wrong way, because it can’t stop viruses it’s never seen before, and one of our clients lost 7 years of data when a brand-new virus accessed his system and wiped everything clean.
Large organisations are beginning to cascade the requirement to have Cyber Liability Insurance down to smaller companies, because ’bad guys’ can often target big companies by attacking small companies. Tesco, for example, has a requirement that all suppliers hold Cyber Insurance and Government contracts are starting to include it as a tender requirement for their own protection.
Another increasing area which Cyber Insurance can cover is cyber-crime. Phishing, Smishing, VOIP attacks, Ransomware etc. for further details please see our Cybercrime page. Not all insurers include this automatically, a number issues separate policies to cover this type of specialist crime.
What makes Prizm different is that we are one of the top brokers for Cyber Liability Insurance and Cyber Crime Insurance in the UK and one of our directors (Tracy Pound) is a leading IT Consultant and brings over 30 years of experience in understanding this type of risk. Our sister company Maximity also run free cyber workshops to help our clients understand how, even if they hold insurance, not to make a claim, by keeping vigilant and being prudent.
Traditional Insurance Won’t Include Cyber Liability Insurance
Traditional insurance policies will quite happily cover you if you have a fire or get your computers stolen, but they have never covered the risk of someone clicking on a dodgy email and accidentally downloading ransomware, or a hacker targeting you, or even an employee deliberately trashing your system because he/she is off to work for a competitor tomorrow. This is why businesses need this type of insurance.
Please talk to us. Cyber Liability Insurance is not expensive, especially when compared to the alternative of being uninsured and the brown smelly stuff hitting the fan…
Cyber Liability Insurance Is Not Expensive
GDPR fines can amount to 4% of global turnover and yes of course it is highly unlikely you’ll be hit with that level of fine, but look at https://ico.org.uk/action-weve-taken/enforcement/ and take The British and Foreign Bible Society, they were fined £100,000 by the Information Commissioner’s Office, after their computer network was compromised as the result of a cyber-attack in 2016.
That is a vast sum of money and could destroy most small businesses and the bigger the businesses, as the bigger the business, the bigger the fine could be.
Take Bupa Insurance Services Limited (Bupa) they were fined £175,000 by the ICO for failing to have effective security measures in place to protect customers’ personal information.
Yahoo were fined £250,000 and Facebook £500,000.
Cyber Liability Insurance can help with all of this and premiums start at less than £150 per annum for small/micro businesses. Please talk to us for further details.
What makes Prizm Solutions different from most brokers is that in most cases we don’t take a commission from the insurance companies for placing your business with them. We are much more ethical than that. What we do is charge our clients a fee, which you will know up-front so that our earnings are transparent.
Please click here to arrange a call back so we can discuss your Cyber Liability Insurance policy requirements and help you make an informed decision regarding this or any other insurance matter for your business or for you personally. Or email us if you would like a quotation.
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