Are you covered for a cyber attack?

February 22, 2016 by Andy Crow fro Chorus Business Advisor's

Are you covered from a Cyber attack?

The headlines are screaming almost daily with new instances of Cyber Crime.

From Talk Talk to the BBC, everyone seems vulnerable. That includes you and your business. So to combat this should your business take out cyber insurance and if so what type?

Liability or First-Party Cyber Insurance?

When a business experiences a data breach it files a claim on its first-party Cyber Risk Insurance policy. The benefits it could collect from this policy typically include funds for

♣ Notifying clients that their information was compromised or exposed.
♣ Purchasing credit monitoring services for customers affected by the breach
♣ Launching a PR campaign to restore the reputation of the company.
♣ Compensating the business for income that it isn't able to earn while it deals with the fallout.
♣ Paying a cyber extortionist who holds data hostage or threatens an attack.( Ransomware) Any company that stores customer data (in the form of email lists, credit card records, or other files) could be victimized by a data breach and benefit from first-party Cyber Risk Insurance coverage.

Cyber Risk or Third Party Insurance?

Third-party Cyber Risk Insurance covers businesses or individuals "responsible" for the systems that allowed an attack to occur. It offers protection for those who are responsible for the safe storage of data (e.g., those who manage a network that was breached or attacked by a phishing or pharming incident).

Events that might trigger a company to file a claim with its third-party Cyber Risk Insurance policy include

♣ Failure to prevent the transmission of a virus to a third party. If a security gap in your software let a virus onto your client's machine and it spreads to your client's email contacts.
♣ The misuse, or theft of confidential information stored on a network. If the systems you set up allowed a hacker to access and/or expose your clients' customers' information. ♣ Infringement of the right to privacy. If an event in which a system you built failed to keep confidential information properly secure.

Who Needs Third-Party Cyber Risk Insurance?

Because in the lawsuit-happy world we live in, no business is too small to be named in a suit. If and when a major company experiences a data breach, its lawyers could name everyone who worked on the system that allowed or failed to prevent the breach.

Therefor even if you only worked as a consultant for a company you never had direct contact with, you could find yourself being named.

This all sounds scary stuff and the risks will only increase as more data is online and in the cloud, and the hackers are honing their skills. Chorus Business Advisers can give you more information on this and other matters and put you in contact with insurance Brokers that will provide bespoke policies for you. Contact us on 0845 867 1263 or email info@chorusadvisers.co.uk