Cyber risk insurance can be useful for businesses large and small. It doesn't matter if you're a sole trader or a giant corporation, data breaches or hacks can be costly and embarrassing to deal with so it's worth looking at the cover you have that can help if the worst happens.
This guide explains what cyber risk insurance covers and why you may need it. You can get a quote on Hiscox's website.
If you're an IT contractor we've created a group where we've negotiated an exclusive discount on professional indemnity and liability insurance.
Read on to learn about:
- Do I need cyber insurance?
- What does cyber risk insurance cover?
- How much does cyber risk insurance cost?
- Insurers that provide cyber insurance
- How can I prevent against cyber risks?
Do I need cyber risk insurance?
If your business relies heavily on IT or if you hold sensitive customer details that could be at risk in a data breach, you might want to consider cyber risk insurance.
A UK Government survey estimated that 65% of large firms suffered a cyber security breach or attack in 2016, and of these, 25% experience a breach once every month.
The average cost of a breach to a large business was estimated as £36,000, yet only 51% of companies have taken the government's recommended actions to identify cyber risk.
Cyber risk insurance can help cover costs you if you are unfortunate enough to suffer a cyber security breach. It can pay out costs for fines or legal fees and compensation if you are sued, as well as the costs of repairing your website or replacing data.
You may have some level of cyber insurance with a business insurance policy, such as a professional indemnity policy. However, specific cyber risk insurance can offer more comprehensive cover, especially if you rely heavily on IT to conduct your business.
As well as this, cyber insurance can help your business get back up on its feet after a cyber attack. Hiscox's service, for instance, is primarily set up to help businesses get their site, systems and data secure and up and running with specialist technical support. This can save you time, as you may not have to find your own support after an incident.
You can find out more about business insurance and get a quote from Hiscox.
What does cyber risk insurance cover?
Cyber risk is the danger of disruption to a business due to a failure of its IT system. This could be as a result of being hacked or information being stolen, which may include some form of identity theft if the hacker is stealing your domain.
Disruption can mean financial loss, damage to reputation, business interruption and reparations.
This can include a website being hacked or stolen, which may include some form of identity theft.
The owner of a lifestyle website recently wrote about her domain being stolen, which highlights how dangerous this sort of crime is.
Cyber insurance can include:
- Cyber liability insurance, or data breach insurance, can cover fines or compensation as a result of legal action brought against you as a result of a data breach.
A data breach is when confidential information is unintentionally leaked, perhaps because of a hack or careless disposal of a computer. Insurance can also cover the costs of notifying customers about the breach and any loss of customers due to damage to your reputation.
Your policy may also be able to cover the investigation and legal costs associated with any security breach, and even the media costs associated with a loss of reputation.
- Hacker damage insurance can cover the costs of repairing, restoring or replacing your website or electronic data if a hacker damages them.
- Cyber extortion insurance can cover you if a hacker has stolen your website and forces you to pay them money to return it.
- Business interruption insurance may be able to pay out if you suffer a loss of income due to a cyber risk.
Along with financial compensation, some insurance companies may offer support if something has happened to your electronic data or website. This can include assistance from a crisis containment organisation or public relations firm, which can help minimise the damage to your company's reputation, and information on how to deal with a cyber attack.
How much does cyber risk insurance cost?
Cyber risk insurance can cost around £200 a year for a sole trader that processes credit card information and needs £100,000 of cyber risk cover. For a larger corporation, this number can be much higher.
Remember that the cost of cyber risk insurance will vary depending on factors such as the size of your business and the kind of activities it takes part in, as well as the amount of cover you need.
You can get an online quote for your business through Hiscox.
Cyber risk cover can be bundled together with other business insurance, which may make it cheaper.
Insurers providing cyber risk insurance in the UK
Hiscox provides cyber insurance for companies operating worldwide. This comes as a part of its business insurance. The company can insure you for up to £10m in cyber risk insurance, with a variable excess from £500 to £10,000.
Their insurance is primarily set up to provide companies with the tech support they need to get their website, systems and data secure and back up and running. This means if you don't have an in-house tech or IT team, Hiscox might be able to get you secure and back up doing business faster than if you sought help from a specialist company.
If you can't find a cyber insurance company that appeals to you, an insurance broker may be able to help. A broker acts as the middle man between you and an insurance company and may be able to find you a better deal on your insurance.
How can I prevent cyber risks?
Cyber insurance can help get your business back on its feet if it has suffered an attack. However, you might want to implement security measures early on to prevent anything happening to your website.
The government has introduced several schemes to help businesses improve the cyber security of their websites and data. One such programme is the government's 10 Steps to Cyber Security, which outlines the steps you can take to improve the security of your business.
Cyber Essentials is a government-backed scheme aiming to improve the cyber security of companies. This scheme encourages organisations to make their websites more secure through five techniques:
- Boundary firewalls to prevent unauthorised access
- Secure configuration so your systems are set up securely
- User access control to restrict access to those who need it
- Malware protection to protect against viruses
- Patch management to make sure software is up to date
Your organisation then contacts an accreditation body, which will verify your changes. You can then be awarded the Cyber Essentials badge.
The government says that the badge can help to protect organisations against common cyber threats. It may also improve your relationship with your customers because they will see that you take cyber risks seriously.
Aside from Cyber Essentials, there are many companies that offer security services to protect against cyber risks.
This article was independently written by Bought By Many. We were not paid to write it, but we may receive commission for sales that result from you clicking on a link to one of our partners.