Cyber Insurance - Is Cybercrime the biggest threat to SME businesses?

Cyber Insurance - Is Cybercrime the biggest threat to SME businesses?

If like many small businesses, you are becoming increasingly reliant on the digital or online channel both as a revenue stream and a customer communication vehicle, it’s essential that you also understand the changing insurance risks and build appropriate contingencies to manage all eventualities.

When you think of insurance, your mind naturally wanders towards physical threats such as fire, flood or theft, but it could be the shadow of online fraud or hacking which poses the most significant single threat to your business's future continuity.

How big is the Cybercrime epidemic?

Crime is big business, but the key challenge with online fraud and hacker attacks is that the criminals can work from any global location, making it difficult for authorities to trace a physical source.

According to a recent report from McAfee, the leading IT security company, cybercrime is worth 0.8% of the world economy and costs UK business a staggering £6.8bn a year.

Surely it’s just a problem for “Big Businesses”?

Larger companies may make the headlines, but in reality, small businesses are often a much easier target for fraudsters, particularly in cases where a portal or website has a direct connection to personal or client data.  

It is reported that 87% of small to medium-sized businesses have suffered a data breach at an average cost of £60,000.

What types of crimes are taking place?

Personal information is valuable, be it names and addresses, dates of birth or credit card information, if a fraudster can access the data, it can then be resold to a spiders web of criminal organisations.

Around 40% of attacks relate to stealing or defrauding victims of money or personal information, while 50% are protest hacks, 7% cyber espionage between corporations, and 3% cyber warfare between nation-states. Viruses, malware and trojans account for half of all known attacks.

How can a small business protect its data?

Utilising firewall systems, SSL certification and carefully monitoring web-based applications or connections can help minimise your risk, as well as providing staff with strict guidelines in terms of email and web access and password security.

Very often, a data breach can occur through an error or failure of processes, such as sending non-encrypted data files or leaving information on portable devices or laptops.  

Prevention is better than a cure and regular stress testing of your IT platforms as part of your disaster recovery protocols is a must for businesses of all sizes.

What is Cyber Liability Insurance

Cyber Liability Insurance not only provides cover for the costs involved for the reinstatement of websites and back-office systems following a data attack but a full support programme post a data breach.

Cyber Insurance can provide a tailored suite of covers to accommodate most exposures, including:

  • Third-party liability claims following a breach of privacy, confidentiality or transmission of a virus
  • Crisis Management & PR Costs – As highlighted by eBay and the Heartbleed attacks, significant news coverage can occur and managing this process is critical in terms of containment.  Cyber Insurance cover can provide immediate assistance in managing both the press and customers while you focus on the security resolution.
  • System and communication rectification Cover – Repairing systems and reinstating data as quickly and effectively as possible can generate high cost.  A Cyber Liability policy will enable you to reinstate your system as soon as possible, allowing you to resume trading.
  • Intellectual Property (IP) Infringement Protection – Should you accidentally breach a third-party trademark or copyright. (For example, accidental misuse of protected images)
  • Business Interruption – Many businesses rely on their website and back-office systems to function,  as such, it’s likely that your revenues could be impacted.  Cyber Business Interruption cover will protect you against lost profits as a result of a claim.
  • Privacy Breach and Regulatory Costs – Some data breaches can incur potential investigation costs or fines from the government or regulator.  Cyber cover can extend to cover these costs and any penalties imposed.

How much is Cyber Liability Insurance?

Policies can be tailored depending on the specific requirements and size of your company.  

However, Insync has access to specialist facilities for small to medium-sized companies which provide a breadth of cover for a data breach at affordable premium levels.

Next Steps

  • Review your cyber risk exposures and online processes
  • Update or complete a Cyber Risk Assessment (including back-up data processes)
  • Review your Disaster Recovery and Business Continuity Plans
  • Speak to an Insurance Expert about Cyber Insurance

FREE Business Insurance Review

Insync Insurance provides a free review of all your insurance requirements, including on and offline exposures.  

You can book a review online or request a quote for Cyber Liability Cover via our website.  Alternatively, call us on 0330 1240730 for more information.