| FIRELOSS | CYBERLOSS | ||
| Electrical fault causes massive fire at head office premises | Employee clicks on malicious link and systems are encrypted | ||
| IMMEDIATE REACTION | IMMEDIATE CONSEQUENCE | IMMEDIATE REACTION | IMMEDIATE CONSEQUENCE |
| Fire needs to be extinguished | Building cannot be accessed | Virus needs to be removed from the system | IT systems cannot be accessed |
| SECONDARY REACTIONS | SECONDARY CONSEQUENCES | SECONDARY REACTIONS | SECONDARY CONSEQUENCES |
| Alternative office space is required | Alternative accommodation requires paying extra rent | Alternative means of communication and working required in the short term | Labour intensive, creates large amounts of offline information |
| Cause of fire needs investigating | Loss adjusters costs | Cause of computer failure needs investigating to prevent reoccurrence | Specialist IT forensic teams highly expensive |
| Investigations take up management time | Investigations take time, systems still not accessible | ||
| New equipment needs to be purchased | Funds required for new equipment | New "clean" equipment required that is virus free | Some equipment might be irrevocably damaged in the attack and needs replacing |
| Offices need to be rebuilt | Funds needed to rebuild/repair damage depending on the severity of the fire | Systems need rebuilding, data needs to be reconstructed | Takes time. Data which cannot be restored from backups needs to be manually restored. Labour intensive extra staff required |
| Office fit out | Funds required for replacing lost contents | System needs testing to see if they work before roll out | Creates time delays and prevents use of systems, compounding extras costs once systems are restored |
| Lost time in having no offices | Overtime required to catch up with the down time to minimise impact on business | Lost time in having no systems | Overtime to catch up, all the information created offline now needs to be entered back on to the system |
| Lost Sales | Having no office, can result in a direct loss of custom, new orders cannot be taken, existing orders delayed direct impact to cash flow | Cause of computer failure needs investigating to prevent reoccurrence | No IT systems means new orders cannot be processed, existing orders are lost, invoices cannot be generated and sent out, direct impact on cash flow |
| Business moves to competition | Business moves to competition | ||
| Crisis containment/PR | In the event of a fire loss, a company would want to reassure its customers that it’s still able to trade and fulfil requirements to help minimise the damage to a company’s reputation and any loss of trading. This could extend to any environmental impact and responses may include a formal communication strategy to running a 24/7 crisis press office, depending on the severity | Crisis containment/PR | In the event of a data breach, prompt, confident notification and communication is critical to help minimise the damage to a company’s reputation. Responses may include a formal communication strategy to running a 24/7 crisis press office, depending on the severity. |
| Fines/Penalties | H&S investigations, possibility of fines/prosecution | Fines and Penalties | GDPR/ICO investigations and penalties PCI Investigations and fines |
For more information or for a full review of your insurance needs, please see our insurance specialisms, contact your usual Towergate Insurance Brokers adviser or email TIB@towergate.co.uk.
About the Author
Marc Rocker, Head of Cyber has been with Towergate for over 15 years advising commercial clients of all sizes on their business insurance needs.
As Head of Cyber Insurance, Marc has responsibility for ensuring that the advice and products that Towergate provides meet clients’ needs. Marc is a member of the British Insurance Brokers’ Association (BIBA) cyber technical committee.
Consistent with our policy when giving comment and advice on a non-specific basis, we cannot assume legal responsibility for the accuracy of any particular statement. In the case of specific problems we recommend that professional advice be sought.
