We’ve all heard of Cyber Insurance and how important it is right, but what actually is it? What does it do, do I really need it?
One of the most common responses we hear when mentioning Cyber Insurance to our business clients are things like “we have an I.T provider that maintains our computer networks, so I don’t think we really need it”. Or there is often the classic “if I’m hacked, my I.T people will deal with it”.
In part I believe this may be in many cases a natural reaction when people don’t fully understand, or even want to understand their cyber risks, so it is simply easier to ignore.
Despite this, the statistics are only trending in one direction and cyber risks are real, whether we want to collectively face it or not. Quite simply there are people out there able and willing to exploit our I.T vulnerabilities for financial gain, notoriety, or just for fun. All can be equally as devastating.
Cyber Insurance doesn’t need to be overwhelming for small businesses and for the purpose of understanding the fundamentals, cyber cover can be generally broken into four main sections of cover.
First Party Loss
These are your own expenses that relate to reinstating your I.T infrastructure after you suffer an insurable cyber incident. These can include costs to remove malicious software, re-configure your computer systems or other expenses of re-securing compromised data.
Third Party Cyber Liabilities
If you suffer an insurable cyber event, you may also be liable to other parties if they’ve also suffered a loss as a result of your incident. These liabilities could be an infection of their I.T systems, where you’ve unknowingly facilitated the spread of a harmful or malicious virus, or you contribute to the interruption of their online operations.
Online Business Interruption
Online Business Interruption relates to your online loss of profits arising from an insured Cyber Event such as hacking. For example, your website may be compromised from a DOS (Denial of Service) attack which disables your website and transactional platform for a period of time.
Costs and Expenses
Cyber Cost and Expenses are generally related to privacy breaches and the associated costs of notification to the affected third parties. Depending on your business and size, you may be legally obliged to notify potentially affected third parties as part of the Privacy Act and National Privacy Principals (NPP’s).
As specialists in the Technology Sector McLardy McShane South East have the knowledge and expertise to help you with your cyber requirements. Contact us if you would like to discuss further.