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How to get the right cyber insurance for your business
Cyber crime is a rapidly increasing risk for Kiwi businesses. Having the right cyber cover in place can help your organisation navigate through a cyber attack and recover faster.
With technology at the heart of almost every business, data protection and network security are leading risks for all businesses.
This year, the annual Allianz Risk Barometer named the threat of cyber attacks the number one risk for businesses globally. Cyber criminals don’t discriminate, and anyone with a website, computer, email address, mobile phone or even an EFTPOS terminal can be a target. While a cyber insurance policy can’t prevent a breach of network security, it can assist if a business suffers one.
Why cyber insurance?
Cyber insurance can help businesses manage and recover from a cyber liability such as ransomware, a virus, malware infection, DDoS (denial of service) attack, or loss of data and privacy breach. The right cyber insurance cover can limit the fallout of a cyber attack, give the business access to the right resources and advice, help manage legal obligations, and assist in avoiding potentially catastrophic financial and reputational implications.
Common cyber insurance policy inclusions available through insurers might include: business interruption insurance; third party liability insurance; cost to revenue or income loss cover; forensic data retrieval services; public relations expenses, and consultation expenses if expert advice is required to negotiate a pathway through the cyber attack.
Adding up the costs of a cyber attack
The costs to a business stemming from a cyber attack can be very high.
Immediate costs to the business could include legal expenses, costs associated with a forensic investigation, notifying customers, and potential public relations expenses.
However, some costs might take longer to be realised. These could include loss of revenue through reputational damage, the impact on a publicly listed company’s share price, third-party litigation expenses, or the company’s statutory liability if found to be in breach of the Privacy Act 2020 under which it is mandatory for companies to report any data breaches.
No sector is immune
Any business that transacts online or via electronic means, or stores customer data, is at risk of a cyber attack. While some methods, such as phishing, are relatively simple in that they rely on human error, the nature of cyber attacks are always changing. Extremely sophisticated hacks can target multinational corporations and government agencies, impacting on ordinary peoples’ lives in ways that are still being discovered.
These impacts can be felt in different ways by different sectors of industry. For a retail operation, for example, online sales could become impacted, with a website potentially rendered unusable, paralysing ecommerce capabilities.
A business in the construction industry might be impacted by supply chain disruptions or a hacker fraudulently impersonating a sub-contractor, resulting in a major data breach or loss of competitive advantage. An institution such as a bank or legal practice could suffer major reputational damage if highly sensitive client information was exposed, rendering future profit forecasting null and void.
Your cyber insurance sorted
Cyber risks differ for every company and industry. It is important to speak with an expert cyber insurance broker about what coverage your business might need for the most suitable protection. Crombie Lockwood’s expertise in the field, matched with its robust claims management process, ensures any business can obtain the insurance protection best suited to this ever-evolving situation.
Published April 2022