Why every business now needs cyber insurance

Published by

TBM Team

With millions of employees working from home across the UK during the Covid 19 lockdown, business owners are hard-pressed to respond to the variety of risks that even the most well-prepared organisations are facing, writes Vincent Kenneth, CEO, Cyber Covered.

While businesses and communities across the country come together to overcome the global pandemic, one unpleasant but sadly, not surprising outcome, has been the dramatic spike in cyber-crime.

With over 200 fraudulent websites purporting to be providing official information – but in reality, designed to steal information or infect the network of the user – shut down in the first week of the outbreak alone, many argue a ‘perfect storm’ of cyber risks is emerging.

The cyber risk ‘perfect storm’

With businesses of all sizes forced to work from home, it is no surprise that many are struggling to adapt to the requirements of remote working, understandably focusing on functionality rather than security, when it comes to their IT set-up. From insecure WiFi connections and the use of personal devices to share and store company information, to the use of video-conferencing software and VPNs (virtual private networks), the tools designed to enable remote work only increase potential access points for cyber criminals.

For many businesses, particularly small and medium companies, these challenges have to be addressed in tandem with a workforce not used to working from home and using a range of new technology, while managing an unprecedented surge in remote network activity.

Such issues create challenges for firms even under normal business conditions but the global pandemic has seen cyber criminals dramatically increase the number of attacks designed to exploit existing vulnerabilities and capitalise on people’s inexperience and current concerns.

Why should every business have cyber insurance?

Having a cyber insurance policy is essential for all businesses and business owners in today’s online world. A cyber insurance policy should be given the same importance as buying public liability and professional indemnity insurance.

The cyber liability faced by every business is now far greater than the traditional risks to a business.

Key cyber risks to a businesses

Business interruption

A cyber incident resulting in loss of income, and extra expenses due to the increased costs of working through an interruption can be very costly to a business.

Cost of adhering to GDPR regulations following a breach

A data breach will be demanding for any business. Costs to manage a data breach may include forensic IT expertise, PR professionals and legal expenses in addition to the costs incurred notifying customers.

Legal expenses

A cyber incident will require the involvement of a lawyer to deal with the ICO following a security breach or the liability and legal expenses from a legal suit made against you as a result.

Cost of restoring data

This is expensive to a small business. Specialists may be required to restore any lost data or fix systems damaged by a cyber-attack.

Fraudulent transfers

We have all heard of people paying fraudulent invoices. Cybercriminals are coming up with smarter ways to trick businesses into paying or transferring funds as a result of a breach.