What Does Cyber Insurance Cover?
Caeva O'Callaghan | November 20th, 2023
Cyber insurance covers a range of threats your business may face online. These include attacks by hackers, which can come in many forms.
You should take cyber attacks seriously, as they can have dire consequences for business operations.
In this article, we’ll answer questions such as:
- What are the risks cyber insurance protects against?
- What is cyber insurance?
- Does my business need cyber insurance?
Ransomware and malware
Cyber insurance will cover the costs associated with an attack in the form of ransomware, malware and other unwanted software.
In both cases, the user unwittingly installs the software without full consent. Malware is a catch-all term for any type of malicious software which harms or exploits programmable devices, services or networks. In most cases of malware, the motivation is to cause the business harm. It does this by causing loss of income, loss of data or worse.
Malware comes in many forms including viruses, trojans, spyware and adware. In many cases, malware disguises itself as a non-harmful program, or hides altogether. Malware can delete and corrupt files, create backdoors in your security protocol, or erase important data. It may also collect sensitive material such as passwords and credit card information.
Ransomware is any kind of malware which threatens harm unless the user pays a fee. Dangerous for your business and profitable for hackers, this kind of threat often demands untraceable cryptocurrency as its ransom of choice. Targets are often small to medium enterprises which can afford a few hundred euros each time but which haven’t got the resources to stop the infection. Your cyber insurance policy will provide you with a team of experienced experts to help you navigate the negotiation. It will also help you put preventative measures in place to stop it happening again.
Data breaches and email attacks
An email attack occurs when email is used as an attempt to cause damage or harm to either an individual or an organisation. Hackers use email in many different ways, but the goal is always the same: to gain money or data, or both.
Phishing is the name given to a non-genuine attempt to obtain sensitive information such as usernames, passwords and credit card details by pretending to be a trusted entity. It’s easy for any institution to have its identity stolen for a phishing attack. Common targets include banks, tax authorities, and energy companies.
Phishing emails can appear legitimate, and may trick users into opening an attachment or clicking a malicious link, which then compromises the system. If you spot a phishing email, delete it immediately. Check for strange-looking “from” addresses, or misspelled links or URLs (such as Loyd’s Bank instead of Lloyd’s Bank). Furthermore, phishing emails are random and will have no data for personalisation, so will often start with generic greetings such as “Dear Sir or Madam”.
Business Email Compromise (BEC) is when a business relationship is hijacked through email. For example, a criminal may register a similar email to your own, and contact your client requesting payment to their own account. According to the FBI, BEC attacks cost US organisations $26bn between 2018 and 2019, and is one of the main reasons companies file a cyber insurance claim.
Again, your cyber insurance policy will provide you with a team of experienced experts to examine the source of the breach and stop it. They will notify affected parties as well as covering the cost of fines and any defence required.
Loss of income, risk prevention and other costs
Cyber crime can severely impact your business revenue. Loss of income as a result of damage to your reputation and operational outage may be considerable following even a minor cyber attack. You must notify your customers if you suspect their data may have been stolen, and this may affect their decision to renew your services. They may also leave unfavourable reviews online and via word of mouth.
You may even need to shut down or suspend trading for a certain period of time while you sort out the damage and put new security procedures in place. This can be very costly.
Cyber insurance will cover this loss of income, and help you concentrate on taking care of your customers. They will have many questions, and will appreciate you personally making contact.
Your insurance company will also offer support to help you manage cyber risks to your business. This may happen online, during on-site visits to your business premises or on a pay as you go basis.
Third party liability costs are typically compensation costs payable to your customers, suppliers or employees and defence expenses you incur. If you are found to be handling sensitive personal information without necessary security measures, you will be found liable.
None of this needs to be a hassle if you have cyber insurance in place before it’s too late. Give us a call today to find out what policy will suit your business.
All Information in this post is accurate as of the date of publishing.