The threat of cybercrime is one of the biggest faced by individuals and businesses worldwide, and yet we still see many clients facing this risk without having protection in place: protection in the form of cyber, data and crime insurance.
It is difficult to comprehend why to take this risk when you consider how catastrophic cybercrime can be. A virtual virus could spread around the world within minutes, carrying the probability of bringing down national and worldwide networks that we have become so reliant on in our everyday lives.
The role of cyber, data and crime insurance in an overall insurance portfolio has never been as important as it is at the current time. Cybercriminals are always evolving, taking into account new opportunities to exploit businesses in new and different ways. According to the Government’s Cyber Security Breaches Survey 2020*, the extent of cyber security threats has, far from reducing, in fact evolved and become more frequent.
Cyber, crime and data insurance covers losses relating to damage to, or loss of information from, IT systems and networks. Policies generally include significant assistance with and management of the incident itself, which can be essential when faced with reputational damage or regulatory enforcement.
Cyber and data risks fall into first-party and third-party liability.
First-party liability cyber cover protects your assets, such as:
Third-party liability data cover protects your customers' assets, including:
With cyber-crime attacks becoming ever more widespread and sophisticated, you need to be sure you’ve got the right protection. Especially since the arrival of the GDPR. What support does your insurance provide if you suffer a data breach? Have you got cover for reinstating data? If you’re subject to a regulatory investigation, are your costs covered?
Cybercrime comes in all different forms and not many days go by at a time without hearing about a new cyber-attack, whether it be online fraud, hacking, viruses, malware, ransomware, phishing or smishing.
For more about some of the threats you face, watch our short video:
Digital technology is an essential part of business today. Almost all businesses rely on information technology (IT) infrastructure to some degree, which is why cyber and data security breaches can be so damaging.
According to the Government’s Cyber Security Breaches Survey 2020*, almost half of businesses (46%) and a quarter of charities (26%) reported having cyber security breaches or attacks in the previous 12 months. It is higher among large businesses (75%) medium businesses (68%) and high-income charities (57%).
Clients should particularly think about purchasing cyber, data and crime insurance if they:
The Government’s Cyber Security Breaches Survey 2020* tells us that breaches that result in a negative outcome incur substantial costs. Among the 46% of businesses that identify breaches or attacks, one in five (19%) have experienced a material outcome, losing money or data. Two in five (39%) were negatively impacted, for example requiring new measures, having staff time diverted or causing wider business disruption. Similarly, among the 26% of charities reporting breaches or attacks, a quarter (25%) had material outcomes and over half (56%) were negatively impacted.
Where businesses have faced breaches with material outcomes, the average (mean) cost of all the cyber security breaches these businesses have experienced in the past 12 months is estimated to be £3,230. For medium and large firms, this average cost is higher, at £5,220.
With 32% of those who identified breaches or attacks, experiencing them at least once a week in 2020, it’s easy to see how quickly costs can escalate.
|Ransomware #1Cyber Issue (1)||Social Engineering A major issue - Theft of funds, fake CEO Fraud etc (2)||Between two thirds and three quarters of all cyber losses have an element of human error (3)|
|Cybercrime is 50% of all crime in the UK - There is no 'Emergency' or stage service - Police do not have funds, resource or expertise (4)||You are 9 times more likely to to have a cyber event than a property loss as a business (5)||965 Claims Are first party (own loss) as opposed to third party liability (6)|
|"You are not targeted because you are valuable, you are targeted because you are vulnerable (7)||70% of UK businesses are aware that cyber exposures are a risk, yet only 10% of UK businesses currently purchase cyber insurance (8)||That an average losses from cyber breaches also soared from £179,000 to £289,000, an increase of 61% (9)|
2. CFC Underwriting
6. CFC Underwriting
7. CFC Underwriting
This is a critical part of cyber protection; which underpins the insurance covers.
There are requirements/standards to be complied with, these are simple and easy to comply with see fact sheet.
This explains 4 critical security requirements, as well as three important security standards. These simple yet effective steps will help to ensure good practice to help protect you and make your business less vulnerable.
An integral part of our cyber policy, our award-winning mobile app Response gives policyholders access to a range of proactive cybersecurity tools and services. Standard cyber risk management insurance covers:
You can quickly discover the level of protection you need by taking our simple three-minute cyber risk assessment.
The test will give you an overall risk score and indicate whether you are at high, medium or low risk of cybercrime.
No, it is highly unlikely that your business insurance policy provides you with sufficient cyber protection, which is why it is important to take out a specific cyber and crime policy to protect you. Without the correct level of cover, you’re likely not to be insured should you suffer cybercrime, facing the real possibility of needing to fund the associated costs yourself.
As the cyber insurance market hardens, some insurance providers restricting cover, increasing rates and reducing lines across the board. In addition to this hardening market, recent changes in contractual and increasingly, regulatory requirements have seen the need for larger limits increase greatly.
Weare able to arrange flexible excess of loss cyber insurance policies to top up primary covers. This cover can help ensure organisations are protected against the increasing likelihood of multiple cyber events during a single policy period.
We partner with providers who have a wide appetite with no outright decline sectors or industries, each case will be considered on their own merit.
Alternatively, you can speak to your usual Towergate advisor who will be happy to help.
General Data Protection Regulation (GDPR) impacts every business.
One of the legislation's key requirements is that the confidential data you hold on your customers or suppliers must be processed in a manner ensuring an appropriate level of security. Is yours? See what you should do about cyber and data security and GDPR.
The enforcement of GDPR means that your business can be fined up to €20m or 4% of your turnover (whichever is the greater) for breaches of your customers’ data.
Here’s what you need to do now:
For more details, visit the National Cyber Security Centre.
What should you do if you suffer a cyber or data attack? Here is our three-step checklist:
With the Cyber Crime and Fraud Insurance that's right for you business, you can rest assured that your protection includes:
For more information, to discuss your particular cyber and data security requirements or to get a quote, simply contact Towergate.
To find out more about the threat of cybercrime and practical steps you can take to reduce your risk, browse our range of articles: