Cyber is a relatively new product to come to market. Historically policies such as Property, Liability and Crime have failed to cover the risks revolving around non-tangible assets (data), and network related risks.
With growth in the reliance for technology in all areas of business, and the heightened threat of outsiders trying to access information the threat of these risks has increased significantly.
Why should we be buying this insurance?
All companies have some exposure to cyber risks to one degree or another. Any business that has data on third parties or employees should consider their exposure and, the more voluminous and sensitive the PII (Personally Identifiable Information), the greater the potential liability to third parties or employees. Any company with online sales has a clear exposure, although even companies without this can be left unable to trade effectively when they have a failure of the critical applications within their network. If staff are unable to access sales/marketing lists, customer relationship management systems and supply chain related procurement systems, work can very quickly grind to a halt, resulting in a sharp drop in profits.
Cyber policies typically provide two main elements of cover being first party – loss or damage to your physical assets and third party liability.
First party provides insurance for loss or damage to your digital assets including the costs incurred for restoring, updating, recreating or replacing. The type of loss or damage can include computer crime and computer attacks by third parties, but also accidental damage or destruction and administrative or operational mistakes by employees and third party providers.
In addition it is possible to extend to include associated risks of business interruption and extra expense, cyber extortion, reputational harm.
Third Party – liability to others
If you suffer a security breach on your network, transmit any malicious code, or if you breach any third party or employee privacy rights or confidentiality the costs of the subsequent investigation, defence and civil damages can be significant. It’s possible to insure these costs under the security and privacy liability section of a cyber policy. Also it’s possible to insure investigation and defence costs, as well as any awards and fines if you are being investigated by any regulator as a result of a breach.
For more information please contact the office
Tel: 0151 609 3900