Cyber attacks are the modern crime and cyber insurance is the way for businesses to protect against them.
Technology has revolutionised the world for businesses and individuals alike and the past twenty years in particular have seen monumental shifts in human behaviour directly linked to technological advancements.
For individuals, technology has revolutionised our lives with online shopping, banking and social media a fundamental aspect of our day-to-day activity.
For businesses, this is no different. In fact, some might say it is even more crucial as technology helps drive sales, revenue and profit and connects you to your customers.
It doesn’t matter what type of business you are, or what sector you operate in, technology plays a crucial role in the general operation and function of all commercial organisations.
Imagine running your business without IT? Frankly, for most it is no longer possible for businesses to be without IT for too long.
That says something quite significant as to the dependency businesses have, the efficiencies, advantages and opportunities created by all things digital is enormous.
Cyber risks are not only here to stay but are evolving and manifesting daily, requiring us all to take stock of how we protect and respond to problems. Unfortunately, the technological revolution has also brought about different types of risks to your business – the cyber criminal.
It is far easier and potentially far more financially rewarding for cyber criminals to ply their trade than the “traditional criminal” and it is easier to avoid detection too.
There is an easy and sure-fire solution to cyber crime and that is a cyber insurance policy.
At PHP Insurance, we have spoken to several clients who didn’t realise the risk to their business until it was too late, if you think it couldn’t happen to you, well, it can and it does! Technology has also fundamentally changed the nature of assets.
The shift from the physical asset (for example post, paper records and bank cheques) to the digital (email, electronic data and electronic funds) means that some of our most valuable business assets are now accessible by anyone in the world from anywhere in the world.
This fact also changes the nature of the risk of them being lost, stolen or destroyed. The risk is much higher as so many more people can launch a cyber attack as it can literally be done from anywhere on the planet!
That is what makes it so attractive to cyber criminals as the risk of being caught “red handed” is reduced dramatically, and they have plenty of targets to attack too! And that’s what cyber insurance is there to protect against – the loss, theft or destruction of a company’s digital assets.
Its not just big businesses that are at risk! Are you at risk? Ask yourself the following to establish if you are at risk… Do you?
- hold sensitive customer details such as names and addresses or banking information. Employees and customers for example?
- have a reliability on computer systems to conduct your business?
- have a website or app?
- have a payment card industry (PCI) merchant services agreement.
Many small and medium sized businesses develop a false sense of security when mainly larger corporations and brands appear in the news for being victims.
Such organisations have huge IT budgets and protections in place to avoid cyber events, and even they become victims.
A smaller business that doesn’t have the such resources now are the ones being targeted. For the criminals, holding a few hundred small business to ransom is all too easy.
Human error is also a risk that no business can eliminate. Innocently clicking on an email, attachment or website can leading to horrendous consequences.
This is a difficult area to fully control yet having a suitable policy can assist with the consequences. All businesses have risks, which need identifying, reducing and controlling, so don’t be too complacent.
Cyber Insurance A new type of insurance was essential to protect a company’s digital assets rather than simply protecting the physical assets – hence the modern day Cyber Insurance policy which protects not only loss to a third party (e.g. passing on a virus) but perhaps more likely protects against a financial loss to the insured themselves.
Typically, a cyber insurance policy will protect against “first party” losses (the insured) and “third party” losses (liability actions against the insured from a third party, for example a customer).
First party losses include theft of funds, damage to digital assets and theft of data as three key examples.
