Cyber Insurance is about to become compulsory for all UK firms
Cyber attacks are a case of when, not if, for most businesses.
Cyber Insurance and security is set to become a requirement for any UK firm that uses computers, networks and information technology, so basically all of them.
The new law is the result of a rise in recent cyber attacks costing global businesses around £200 billion annually.
The Insurance Times reported that 60% of small and medium-sized businesses in the UK experienced a cyber breach last year, with the average attack costing around £75,000 in damage to the business.
Despite this some 98% of UK companies are currently trading without any form of cyber insurance, leaving them vulnerable to attacks.
Common types of cyber attacks
A cyber attack typically involves a hacker or group of hackers gaining illegal access to sensitive information belonging to a company or individual person. This might involve breaking into their private network of information and using this data for commercial gain.
For companies data breaches like this might lead to a huge loss in revenue, damage to their brand and potential legal actions from their clients and partners for mishandling information.
Such common cyber attacks include:
Malware – Software that can gather and steal information from other computers without the user knowing.
Virus – A computer ‘bug’ that can be replicated and spread to other computers and networks.
Trojan horse – A code that is hard to detect but can steal and destroy key data.
Phishing – A corrupted link, usually found in an email, and when clicked can cause a computer to crash or trick users into giving away passwords or sensitive information.
What cyber insurance is available?
UK companies can purchase cyber insurance cover ranging from £100,000 up to £5m and even more depending on the size of the company.
The insurance can provide compensation for any loss of income due to a data breach or if data is held ransom by a hacker. You might obtain cover to pay for repairs to your IT network and infrastructure, or if you have to hire in specialists.
Legal action is also common with data breaches as firms may find themselves in a battle with a competitor, employee or third party. Your insurance can help pay for lawyers, compensation and the revenue lost by having to take time off work.
A cyber attack can also manifest in false information about your brand appearing on other websites – so your insurance can also pay for any PR to repair your image.
Craig Anderson, Director at Be Wiser Business Insurance explains “Due to our reliance on technology and the fact that most businesses use IT Systems as a core part of their infrastructure, the need to protect your business against cyber breaches is greater now than it ever has been.
“With over 60% of businesses suffering a cyber breach last year, protection against this type of attack must form part of each business’s risk assessment and it’s strongly advisable to have sufficient insurance cover in place.”
Read more https://www.thememo.com/2016/05/19/cyber-insurance-is-about-to-become-compulsory-for-all-uk-firms/