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:
First-party liability data cover protects your customers' assets, including:
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.
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.
Alternatively, you can speak to your usual Towergate advisor who will be happy to help.
For more information about the range of cyber, data and crime policies we can offer, download our cyber brochure.
To find out more about the threat of cybercrime and practical steps you can take to reduce your risk, browse our range of articles:
Coronavirus (Covid-19) – Update for Towergate customers
During the COVID-19 Coronavirus crisis, we want to reassure our customers and partners that we are following UK Government guidance,
and as a result our national offices are closed to both safeguard the health of our employees and our ability to look after our valued clients.
Where possible, our employees are working from home and we are still fully able to support with renewals, new cover requirements and
claims guidance and support. This includes giving our colleagues the ability to work from home or alternative locations,
which we hope will limit the disruption and enable you to speak to us for advice and support should you need it.