5 Reasons Why you are not buying Cyber Insurance and Should Be
Buying an insurance product is a big decision. There is not only the cost to consider but also the time you need to set aside to understand what your potential exposure is but also how to make sure that the insurance you buy will do what you need it to do in the case of a breach in security either by a hacker or a genuine mistake by a member of staff who inadvertently e-mails data to the wrong person.
It is perfectly natural to worry about whether you are making the right decision about buying a product and with that in mind here are some of the most common concerns my clients have about cyber insurance.
If you are not familiar with cyber insurance then this is a specialist type of insurance you can by that would usually provide cover for the following costs which you might incur because of a cyber incident; cyber extorsion, ransomware, breach costs, cyber business interruption, hacker damage, crisis containment and more.
You may need Cyber Risks insurance if you hold sensitive customer data, such as names, addresses or banking information, or if you are reliant on computer systems to conduct your business, have a website, or are subject to a payment card industry (PCI) merchant services agreement. Damage or unauthorised access to any of these could lead to reputational damage and legal or regulatory costs.
Concern 1: “I don’t need cyber cover”
Cyber-attacks affect companies of all sizes so protecting against this is paramount, if you are using computers in your business then you need to consider the potential costs of a breach or theft of this data. Could you continue to run your business without it? What is the impact on clients? How long would it take to get back up and running? Could you afford to hire an IT company at short notice to fix this for you? Do you have the skills to fix a cyber breach? What would the reputational damage be to your company?
Most people don’t know they need the cover until they have a breach or data is stolen from them, without wanting to frighten you this is often too late, and businesses could struggle to meet the costs fixing the damage. This is where the insurance cover can help cover these costs and help every step of the way.
Concern 2: “I can’t afford it”
If you are not making much money or are in the early stages of your business I can see why spending money on insurance might be off the agenda. If you don’t buy the cover then you are effectively saying you can cover the risk yourself and the costs, but can you? Could cover the cost of crisis response, restoring the security of your IT system, restoring the data, covering any regulatory fines or damages, legal advice, public relations advice?
Many businesses would not be able to with stand these types of exceptional costs to their business and could fail as a result. Our cyber products are based on your turnover or the level of cover you select so are flexible enough to meet the needs of most small businesses.
Concern 3: “I don’t know how much it costs, but I know it is expensive”
So how much does cyber insurance cost? Well it can cost as little as a few hundred pounds a year but if a policy was going to cost £500 a year then it is less than £1.50 per day and with an IT expert or legal advice probably coming in at about that per day, this feels like a much better way to protect your business.
Concern 4: “I don’t have the time”
It is great to be busy, but I strongly believe that if you want to do something you can make the time to do it. We can make this as painless as possible for you; we have a page on our website dedicated to Cyber cover and where you can download the proposal form. You can complete this in your own time or you can give us a call and we can do to over the phone. What it is worth doing in preparation for completing the form or picking up the phone is to have a think about the data you hold, how it is saved, the IT security you have in place and know your most recent turnover figure, with that we can help guide you through each step of the process.
Concern 5: “I don’t know what cover I need”
There are various types of cyber-attack which you may find you are a victim of including; rogue employee, negligence, outsider threat (phishing, hacking, malware etc.) or 3rd party and vendor threat. You should think about what you would do if you were a victim of a cyber-attack and put in place a process to respond.
Cyber insurance can offer protection for cyber extorsion, ransomware, breach costs, cyber business interruption, hacker damage, crisis containment, emergency support, legal advice, public relations advice and restoration of services. The cover provided by insurers differ from product to product and the amount covered or limit of indemnity can also differ from policy to policy, so it is wise to talk to an insurance broker who can steer you through the process.
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You can also find me on Twitter @CathFrance or on LinkedIn Catherine France
