Does my Business Need Cybercrime Insurance?

by | Jun 20, 2019

When it comes to business liability and insurance, are you covered in the event of cybercrime?

If you’re wondering “does my business need cybercrime insurance?”, the answer is “yes”!

The cost of cybercrime

In recent years, cybercrime and data breaches have cost businesses billions. Businesses (no matter their size) that fail to institute precautions and take heed of cyber risks can be crippled or even fail if a cyber incident occurs.

What is cyber insurance?

Cyber insurance coverage provides a professional fail-safe for a breach or cyber attack.

Why get cyber insurance coverage?

From SMEs to big corporates, almost all modern businesses have some form of cyber exposure. When a business’ computer systems are affected by a cybercrime event, this will almost certainly have a negative impact on the overall business operations. Having a cyber insurance policy in place provides a valuable safety net.

When it comes to the effect of cybercrime on your business, it’s a case of ‘when’ rather than ‘if’.

If a breach or attack occurs, you could be left with high costs to:

  • Restore your business
  • Deal with customer lawsuits
  • Reclaim your digital identity
  • Reclaims your financial identity
  • Pay regulatory fines or penalties

Can my business afford cybercrime liability insurance?

The truth is that most businesses can’t afford not to have cybercrime insurance. As a business, your data, digital processes, and client information are all exposed to the threat of cybercrime.

When last did you review your cybercrime insurance?

Most businesses will review their business insurance on an annual basis, checking that the coverage is sufficient for their changing business needs.

Generally, a company’s insurance policy won’t cover every single risk possible. Rather, a simple cost-benefit analysis can help businesses decide on the types of business insurance that they need.

When it comes to cybercrime, it’s anticipated that the risks and costs associated with a breach will continue to rise, making it hard to conduct an accurate analysis. When making a decision about whether or not to take out cybercrime insurance, it all comes down the peace of mind, taking your business’ risk level into account.

What kind of cybercrime could affect my business?

Different kinds of businesses will be exposed to cyber risk in different ways, and there are numerous scenarios that could leave a business exposed to external and internal threats.

Some examples of common cyber crimes include:

  • Data theft
  • Data loss
  • Cyber hijacking
  • Ransom demands
  • Bot scams
  • Viruses
  • Human error
  • Loss of a website or other IT infrastructure resulting in loss of revenue

Cybercrime and GDPR costs

If a cybercrime incident results in a loss of third-party data, you’ll likely need to report the loss to the data commissioner and possibly be liable for PCI fines. Other costs you could incur include:

  • notifying your customers that they are at risk
  • paying for advice to manage your risks
  • paying PR costs to manage the potential damage to your reputation

It pays to pay for cybercrime insurance

Your cyber insurance can cover your business for a multitude of risks, including penalties or fines associated with regulatory investigations.

It starts with cybersecurity

Like everything, prevention is better than cure. Even if you are covered for cybercrime liabilities, you should still implement strong cybersecurity policies and practices and make use of a comprehensive suite of security tools.

What does cyber liability insurance cover?

The level of cover depends on your business function and needs. Through James Hallam Insurance Brokers, we are able to offer comprehensive cyber insurance that protects against risks that the majority of cyber insurers omit.

Examples include:

  • Zero excess for the initial reporting and investigation costs
  • The cover’s full benefits are available for every incident
  • Full retroactive cover
  • Extensive, quick in-house incident response capability
  • Broader cover for senior executive officers
  • Full systems failure cover
  • Business interruption cover
  • Cover of the full supply chain, including technology suppliers
  • Includes botnetting and cryptojacking
  • Extra expense coverage
  • Hardware replacement coverage

How much does cyber liability insurance cost?

The cost of your cybercrime insurance is dependant on your level of risk and the size and scope of the cover you require.

How to get cybercrime insurance coverage

Get in touch with a Smarter Business consultant. Powered by James Hallam, we’ll custom-build your business cyber insurance portfolio for the best cover and savings.

Read more: What kind of business insurance do I need?

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