Technology plays a critical role in every business, and COVID-19 has also meant more functions are moving online. As a result, network security and data protection has become increasingly important, with many creating a cyber risk policy as a result.
Many businesses may think that they are too small to attract cyber criminals. However, when it comes to cyber theft, size doesn’t matter. Cyber hackers are on the lookout for businesses of any size with valuable customer data to steal and sell on the black market.
The threat is real
Picture this. An employee opens an email attachment infected with a ransomware virus. Access to your systems and data are blocked and the virus software informs you that it will remain unavailable unless you pay the ransom amount.
Rather than paying the hacker and opening your business up to further extortion attempts, you hire external IT consultants to recover your back-up data and files and upgrade your antivirus software. Over the week it takes to apply these fixes, you have to close your business, causing you to lose revenue.
It also affects your reputation with your clients; one of your clients threatens to sue you for the delay which cost them a large amount of money.
What is cyber protection insurance?
Cyber Protection Insurance is a relatively new form of cover, and while it cannot prevent a security breach, it can assist in the event of an attack.
A Cyber Protection Insurance policy should be an important part of your risk management plan and is designed to help protect your business from the financial impact of computer hacking or a data breach. It also covers your staff who accidentally make public confidential information, insider theft as well as theft or loss of a device.
What does Cyber Protection Insurance cover?
In most policies, cyber insurance covers your own losses (first party), in addition to your liability to others as a result of a breach (third party).
First party includes business income loss, forensic costs, extortion costs resulting from a ransomware attack, network restoration costs, costs to replicate or replace lost data, and public relations costs to minimise reputational damage.
Third party includes liability for third-party damages, regulatory fines and penalties, public relations costs, forensics costs, and legal defence costs.
Should you consider it?
If your business has a website or electronic records, you are vulnerable to cyber hackers, and is highly likely to be exposed to a cyber-attack at some stage. Examples of cyber security risks include malware, viruses, ransomware and phishing attacks.
The latest CERT NZ* cyber security figures show that between 1 January and 30 June 2020, they received 3,102 incident reports – a 42% increase on the same period last year. Of these, almost 60% came from individuals and 40% came from businesses.
In fact, reported financial losses have hit $7.8 million for the year to date, adding to more than $44 million in losses since CERT NZ started reporting these figures in 2017.
How can we help
At Wayne Grayson & Associates, we believe an informed insurance decision is the right one. Whether you’re after business or personal insurance, our expert brokers will ensure your insurance is the right fit for you.
Depending on your Cyber Protection Insurance policy, you may be able to make a claim for losses caused by the interruption to your business, the costs of recovering your data and upgrading your software, and ongoing crisis management expenses due to a cyber-attack.
Get in touch today to take the first steps toward making an informed insurance decision.
*CERT NZ is your first port of call when you need to report a cyber security problem. We support businesses, organisations and individuals affected by cyber security incidents, and provide trusted and authoritative information and advice.