Inadequate Cyber Insurance is a Huge Gamble
As one of Las Vegas’ biggest casinos becomes the latest in a long line of large, and surprising organisations to suffer from a cyber-attack and data breach. A long list this year that includes Twitter and The Police Service of Northern Ireland (PSNI). As a result, the need for robust cyber insurance cover has become an absolute necessity for some. Here our Managing Director, Bryan Banbury, outlines the high stakes involved with cybercrime when it comes to insurance.
To protect your home and valuables, you might install a high-tech alarm system, with cutting-edge CCTV cameras and a whole host of other gadgets to catch a burglar or intruder in the act. You would also spend some time finding the right insurance policy, which covers your home and valuables, to help in the financial recovery following an incident in your home. While the same process should apply to cyber-security, many businesses are finding that they don’t have adequate cover when they need to make a claim.
The costs associated with data breaches can be high for multiple reasons. Firstly, if your business is hit with a ransomware attack, you may have to resort to paying a sum of money up front to regain control of your data. Secondly, the cost of responding to an attack is also high. Businesses will often need to fund legal and IT forensics teams, offer customer gestures to mitigate permanent reputational damage, and foot the bill for business interruption costs.
So, while an effective insurance policy isn’t necessarily a defence against cybercrime, it is the best form of asset protection to aid in business recovery.
It’s our view that financial recovery following a data breach boils down to two things: your level of insurance cover and the services available from your insurance provider. This is where choosing to work with a chartered insurance broker might provide you with more financial reassurance.
Chartered insurance brokers are proactive in their outlook to cyber-security by paying close attention to detailed integrated cyber response services provided by insurers, as well as expected first and third party covers.
Furthermore, chartered brokers are well placed to point you in the direction of relevant technical forensic investigation and cyber incident management teams, who can provide the necessary legal advice. Most brokers will take a collaborative approach to providing a recovery solution, pairing their own expertise with that of their client to help secure a solution.
Finally, a streamlined claims process is also extremely important to a business. Insurance claims often involve a lot of administration and, in a worst-case scenario, business interruption with financial ramifications. Should you need to make a claim, insurance brokers will often have dedicated claims handling and management teams to ensure the underwriter makes good on the promise to pay. Russell Scanlan, for example, has a claims team to organise meetings with insurers and work with third-party incident management teams to ensure the claims experience runs smoothly.
In an age where technology is developing at an increasingly fast rate, and gaps in cyber-security are becoming ever more exposed, gambling your assets with inadequate cyber insurance with lead to lengthy and costly recoveries. To learn more about our cyber services or claims team, click here or contact us on 0115 798 0786.