Cyber insurance: the cost of restoring data and equipment for businesses
The growth of digital technology has revolutionised business, rapidly increasing the speed, scope and scale at which firms can operate. However, this wave of benefits has also brought a new strain of risks for businesses to consider too.
While locks, alarms and CCTV cameras were once enough to repel potential criminals, companies now need to be aware of the equally potent risks that lurk online.
Cyber-attacks can cause severe disruption to a company, forcing downtime that poses a serious threat to productivity and profitability. In addition, they can result in the theft of sensitive personal data from you and your customers. Along with the immediate financial implications, a cyber-attack could have a long-term impact on your reputation - if your company is deemed ‘unsafe’ to deal with.
Most common types of cyber crime attacks
So, what should you look out for as a business? Common cyber attacks that it pays to understand include:
- Phishing: The name given to the practice of sending fraudulent emails in a bid to get the recipient to part with personal information, such as passwords or bank details. The sender of phishing emails will normally pretend they are representing a genuine company, such as a bank, to gain the trust of the recipient.
- DDoS: This stands for ‘Distributed Denial of Service’ and, in effect, is the process by which a computer network is flooded with traffic to bring it to a grinding halt.
- Ransomware: This is a type of software that infects a computer network and blocks access to it until money (a ransom) is paid.
- Malware: This term refers to malicious software which is designed to infect a computer system – either by gaining unlawful access, or by deliberately causing damage.
High profile cyber attacks
Recent large-scale attacks have attracted a lot of media attention, as the scale and nature of the threat of cyber crime has become clear.
The WannaCry attack affected more than 200,000 computers in 150 countries in May 2017 – most notably affecting the NHS in the UK, causing havoc for hospitals and GP surgeries. This particular form of ransomware attacked Windows computers and demanded payment to restore operations in Bitcoin – a near-untraceable cryptocurrency.
Beyond this, corporate giants such as TalkTalk, Tesco Bank and Sony have suffered high profile cyber crimes – with hackers able to penetrate their robust defences and get their hands on sensitive data.
The cost of cyber attacks to small businesses
It might be tempting for smaller businesses to presume that this sort of cybercrime is something that only affects corporations and other larger organisations – the sort of people with the type of deep pockets that can afford to pay out or with a reputation that is ‘worth’ bringing down. This, however, would be wrong.
Government research found that about half of all businesses in Britain had been subject to a cyber-attack in 2016 alone – with some estimates putting the total cost of damage to business at £30 billion. Given the potential for reputational damage, it’s likely that this form of crime is under-reported and, therefore, the Government’s figure is probably an under-estimation. The point is, however, that any business is a potential victim when it comes to cyber crime.
IT consultancy firm Daisy Group estimated that half the UK’s small businesses could be hacked in under an hour – yet the damage could, in the worst cases, take more than 50 days to fully resolve. This time might be spent recovering precious data that you rely on to make strategic business decisions and restoring or even replacing pieces of equipment that may have become compromised by a cyber attack.
What is cyber insurance?
As with any risk, businesses would be well advised to try to protect themselves against this form of crime by taking out a cyber insurance policy.
For a few pounds a month, these policies offer protection and peace of mind for businesses operating in an increasingly dangerous online business environment– as well as the prospect of support should an attack occur. Not only does the cost of hardware and software replacement stack up, but so too do the costs of damage control.
With cyber insurance from Markel your company benefits from the following:
- Access to a cyber response helpline manned by security experts
- Cover for the cost of restoring data after a security breach
- Reimbursement for the ‘restoring, replacing, rebuilding, replicating or reinstating’ of computer equipment damaged in an attack
- Help to inform clients and third parties about a cyber attack
- Assistance in meeting any ransom demands you might face in cases of ‘data extortion’
- Help to overcome losses in net profit caused by a network interruption
- Support with legal defence costs and damages you are legally liable to pay to other parties
- Compensation if you need to attend court
- Contribution to public relations management if you need to mitigate the potential damage of an attack.
Without this help and support, companies face extremely tough times following a cyber-attack; rebuilding their IT infrastructure as well as their reputation. By taking an insurance policy you can guard against the worst impact – saving vital time and money.