What is Cyber Insurance, and how can it protect your business?
Regardless of your trade or sector, businesses rely heavily on electronic systems to undertake their day to day operations.
From the storage of data and customer records to digital correspondence via email, along with undertaking financial transactions and payments digitally and potentially marketing and communication on social media.
There are risks associated with all of these activities, the majority of which are not covered by a traditional business insurance policy. However, at Mc Grady Insurance we can now offer specialist products to protect your business against these modern risks.
Let’s consider some of these risks in more detail...
Cyber Liability | Cyber Insurance
The Data Protection Act is the main piece of legislation that governs the protection of data in the UK.
Any business that stores ‘personal data’, meaning data that can identify an individual, is subject to the Act. Personal data can be as simple as a name, address or date of birth.
Consider the implications for your business? Even if your customer records only contain basic information, or if you have compiled a marketing list with names and email addresses, you have certain duties under the Act.
If you are a ‘Service Provider’ any personal data breach, including loss of, or unauthorised access, must be notified to the Information Commissioners Office within 24 hours of discovery. Failure to do so can result in a fine. If the breach is likely to affect personal data or privacy, you must also notify those affected.
Let’s consider the real cost to your business for such an event.
- Your liability to others resulting from breach. (With action from individuals becoming more frequent).
- Forensic investigation, system repair, data reconstitution and the resulting business interruption.
- Regulatory Fines, notification & investigation
- Third Party Notification costs (press release, direct mailing, what’s deemed appropriate?)
- Reputational harm following Third Party Notification (including cost of Public Relations consultants to manage)
As you can see, the associated costs of a breach can very much outweigh the initial liability to Third Parties. Most Cyber Liability policies do not cover these additional costs. However, a comprehensive Cyber Insurance policy from McGrady Insurance can.
Multimedia Liability | Cyber Insurance
Communication is instant in today’s industry. An email has been sent often before we have time to proof read. Social Media updates travel the web before we have time to consider the content in full.
We’ve all heard those stories that have hit the headlines.
However the same principals apply to today’s industry.
A throw away comment in an email forms part of a larger chain of communication, resulting in an allegation of libel from a competitor.
Indeed, an employee responsible for your social media channel makes a libelous statement about a competitor or individual.
You inadvertently infringe the intellectual property rights of another party by sharing images or videos subject to copyright.
Commercially sensitive information is accidentally emailed to another party, who are not intended to be privy to such information.
The examples are endless, but in short, as a company you are responsible for the content of your communications and those of your employees. In the event of a claim, have you any protection?
Cyber Crime | Cyber Insurance
Perhaps the biggest concern of business is those risks involving cyber-crime and theft.
We’ve all heard the examples;
- Phishing emails result in a Bacs transfer of funds being sent to a criminal’s bank account, rather than the genuine intended recipient.
- Telephone hacking fraud results in thousands of pounds worth of phone calls being accumulated on a business phone system.
- An infected PC results in your ‘Online Banking’ credentials being compromised, leading to a cyber theft of business funds.
Financial institutions are becoming more reluctant to indemnify against such losses and will more often cite negligence on behalf of the end user, you. Such losses can often cripple a business if adequate insurance cover has not been sought in advance.
If you are concerned about any of the issues raised, feel free to get in contact with McGrady Insurance so we may discuss your needs.
Cover is available to protect your business!
”Cyber risks are fast becoming some of the biggest risks facing business today.
The complexity and uncertainty over these exposures, coupled with the inadequacy of many Insurance policies, leaves many business owners unsure of how to comprehensively protect their business.
At McGrady Insurance, we are pleased to now offer a Comprehensive Cyber Insurance product, tailored both in terms of covers and premium to a range of business needs, including those of the small business owner.
We welcome discussion with any business on these matters and will be actively seeking to educate and protect businesses from the risks they now truly face”
Information and statistics correct at time of publication on 5th May 2016. The information is intended as a guide only and should not be relied upon without further investigation or advice.
A backup drive or laptop is stolen from a company vehicle.
How would you be affected?
Your server is ‘hacked’ by persons unknown, resulting in unauthorised access to personal data.
What would be the real cost to your business?
Compromised Retailers can be held responsible for investigation & fraud under merchant service agreements.
Breach results in loss of commercially sensitive information or non-disclosure agreement breach.
How would suppliers or trade associates react?
Are you protected from claims when content is exchanged under your company name?
Have you thought of such risks?
Cyber crime is the fastest growing crime in the world, yet most cyber policies don’t cater for email scams, identity theft and telephone hacking.
A PC somewhere in the world is infected every 4.5 seconds.
It’s not if, but rather when your business will face an exposure.