Cyber liability insurance is the new kid on the block, there are plenty of reasons to have cover in place, but what are the risks and what solutions are there?
Cyber attacks – the risks posed by cyber fraudsters
Today’s businesses are increasingly at risk of a cyber attack and the fraudsters perpetrating these are becoming smarter by the day. We have all received the emails purporting to be genuine, but underneath they are looking to ‘phish’ their way into our systems. Many sources claim it is not a matter of ‘if’ but ‘when’ your business will become a victim.
Our businesses systems and processes were originally designed to allow us to complete our jobs efficiently, however this has lead to them becoming predictable and as a result easier to breach.
Cyber attack prevention
The most important consideration is that threats change and processes and systems that were deemed secure 1 year ago, may not be now. A policy of (at least) annual review is essential to ensure that the latest methods are considered and that your team are acting appropriately to deflect any potential attacks on your systems.
Having well trained staff who are aware of how a threat may materialise and what they can do to minimise it will help reduce the chance of a breach, but should also reduce the cost of any protection.
These are the areas where Menzies can help, with our knowledge of your business and of the risks we can review your processes and make recommendations on how your business can reduce the potential for a cyber breach.
The Insurance Route
Once you have reviewed your processes this is the time to think about insurance, but I can’t stress enough that this doesn’t mean you will become immune to attacks or indeed to penetration of your systems. Once you have considered and protected yourself against the risks you should be in a position where you never need to use the insurance.
Cover may pay out for:
- the cost of notifying customers of a breach
- losses from business interruption
- the cost of restoring damaged data
- settlement of extortion threats!
What it cannot do is repair any reputational damage that is suffered as a result. For this the greatest protection is to ensure you do everything you can to prevent it happening in the first place.
So do you need cover?
The answer is probably. It really does depend on your individual situation. Some industries are more at risk than others; those managing client funds or processing a large volume of transactions for example. But that doesn’t mean that an opportunistic fraudster won’t spot a gap in your procedures and take advantage.
For help, guidance or just more information on how we could help your business evade cyber fraudsters, contact your Menzies engagement partner or contact us directly.
Comments provided by Mike Ayres – Menzies Manager – who works as part of the Business Services sector team.