Do I need Cyber insurance?

A cyber attack could have serious legal and financial consequences to any business and cause wide-spread reputational damage. It can shut down an operation for days or weeks and be extremely detrimental to the running of the business. 

As the concept of cyber-crime is relatively new, traditional insurance policies generally do not cover the full range of risks, with many gaps in coverage. 

A tailored stand-alone Cyber Liability policy is an essential part of a solution to protect your business. 

What does Cyber Insurance cover?

A policy can offer protection following a breach, covering costs incurred from:

  • Common incidents – network extortion, cyber espionage, identity theft, data breaches, and online scams.
  • First Party Loss – business interruption, electronic data replacement, forensic breach response and reputational damage.
  • Third Party Loss – security and privacy liability, defence cost, regulatory breach liability, multimedia and intellectual property liability.

Examples of Cyber Insurance Claims

Cyber criminals target company with ransomware 

An employee opens a phishing email and introduces ransomware to a company’s network, encrypting critical customer data files. The company decides to close down its network as it reinstates systems. 

Breach response services take immediate effect and can identify the source of attack and have the business back up and running within days, limiting downtime. 

The policy covers the first party costs, as well as potential business interruption and additional costs of workarounds.

Scammers trick executive into transferring funds

Fraudsters use information gained from social media and a spoof company email to impersonate a supplier, tricking the finance director to wire funds to the criminal’s account.

Policies can indemnify insureds for their monetary loss when employees were misled into transferring money, securities or assets to an unintended third party.

An operational error leads to a network failure

A hardware failure at a global airline causes an unplanned outage of critical systems. Although the systems were quickly restored, a mistake caused by an IT contractor damaged the IT infrastructure. The resulting business interruption lasts over a week, costing tens of millions of dollars in lost business and compensation paid to passengers.

A bespoke cyber insurance policy covers the first party cost of rebuilding IT systems and lost data. The policy provided crisis management services to minimise the reputational damage, as well as indemnify the cost of passenger compensation, workarounds and loss of profits. 

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