The new insurance challenges brought about by cyber crime
The director of insurance brokers Macbeth told Business Advice how the rise of data theft has brought with it a range of tricky insurance challenges for businesses ? and how you can best cope with them. Cyber liability is often overlooked as it protects those intangible property such as websites, data and the loss of online business as opposed to more obvious types such as employer indemnity. Small businesses tend to think that cyber crime is something that happens to big businesses ? we?ve all seen the media coverage. In 2014, 87 per cent of small businesses reported a cyber breach. What do these look like? In the main, it?s theft of financial data, money transfers, customer payment details, card numbers, bank accounts. The side effects can be catastrophic; reputation is damaged, security discredited and customer trust irrevocably harmed. For small businesses, cyber liability will plug that gap found in many standard insurance policies around online protection from email, internet and IT networks abuse or misuse. Here?s what every micro firm needs to know:
Am I at risk?
If you hold sensitive data or use the internet to run your business, yes. That includes recruitment, tech, health, retail sectors to name a few ? all commonly found in the startup and small business space. What?s more, ongoing legislative changes ? domestic and EU ? especially around the use and storage of personal data, make it an ever-complex matter.
What does cyber liability do?
Also known as internet liability insurance or data insurance, cyber liability insurance protects against compensation claims arising from:
Staff misuse of company email (for which you are responsible), or the content on your website or blog, that potentially defames or libels a third party
System damage caused by viruses or malware you may have transmitted ? unknowingly ? online
Security breaches that give unauthorised access to confidential data
Financial losses caused by a company website failing, your internet provider going down or hackers
Why you need to think about it
Cyber liability provides specialised protection often not included in general liability policies
It protects your financial interests against the greater risks associated with a high profile online presence- even if a claim against you is invalid
It minimises any disruption to your business when managing your way back to normality in the event of any incident. For example, data breach protection can offer a one-stop shop to cover each touch-point of your business impacted, from legal advice through to PR support. Ultimately, cyber liability is a risk transfer solution. It will provide the protection needed to manage the damage and mitigate the costs involved in a loss or theft of data, network interruption or privacy violation. Can you afford to be without it? Ben Butler is the director of insurance brokers Macbeth.
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