All companies rely heavily on technology in the modern age, particularly post-pandemic, which causes the cyber risk to increase exponentially. Cyber incidents can disrupt businesses through financial loss, operational downtime, reputational damage and legal action.
We see a lot of media attention given to cyber events at large organisations, a notable example being the Maersk cyber attack in 2017, but cyber threats and vulnerabilities more and more frequently impact SMEs. The main reason is that the smaller to mid-size companies are seen as easier targets for cyber criminals, usually due to limited IT resourcing and investment. Companies may also neglect risk management measures such as staff training on data security, guidance on password setting and multi-factor authentication. This is an attractive opportunity for cyber criminals compared to larger organisations, which are often harder to crack.
Consideration also needs to be taken that you may not be the initial target but can still be impacted by an event experienced by a business partner.
Cyber Insurance covers various areas to protect your business. Listed below are some of the potential key areas for your business:
Cyber crime
Cyber crime is a huge threat to any company. It can involve financial loss due to unauthorised access to your IT network. You can also be at risk from a third party deceiving you or an employee into paying/transferring money by impersonating a false persona. In March 2021, www.ons.gov.uk published that the number of reported cyber crime-related incidents was at the highest in four years at 1,749,000. Many cyber crime-related claims are purely down to human error, clicking on a phishing email link or paying a fraudulent invoice.
Phishing
Phishing is one of the fastest-growing causes of cyber losses. It is the fraudulent practice of sending emails purporting to be from reputable companies in order to induce individuals to reveal personal information, such as passwords and credit card numbers
Ransomware/extortion
Ransomware is a type of malicious software used to prevent you or your employees from accessing a computer or its stored data. For example, the computer itself may be locked, or the data on it might be stolen, deleted or encrypted. Usually, once the attack occurs, the attacker will use an anonymous email address with instructions for making a payment and getting the data back. This is where the ransom element comes in.
Data breaches
Data breaches are a significant part of cyber risks with GDPR regulations and consumers who want their personal data to be kept safe and secure. Firms can risk substantial fines from the Information Commissioner’s Office (ICO) if data is not handled correctly or finds its way into the wrong hands.
It’s hard sometimes to see the real-world scenario that may unfold from these risks for your business. However, movers & storers rely heavily on IT systems. As well as moving and storing goods, personal data relating to customer details is stored. If your customer’s data is hacked, does your company have procedures in place to notify your customers? What about any reputational damage suffered because of a data hack?
Cyber Liability policies have experts on hand to cover the costs of notifying customers and reporting to the ICO and PR teams to help mitigate any reputational damage to your firm.
To help you understand what may occur and how having the relevant cyber policy in place may help.
Phishing scenario
A fi rm was the victim of a malware phishing attack. An employee had a pop-up on their computer after clicking a malicious link within an email. The pop-up stated the computer was infected and to call the number provided. Fraudsters then gained remote access to the employee’s computer by further deceiving the employee during the call.
Even with the best security technology and systems, your most vulnerable asset will often be your staff. Staff can be duped into surrendering passwords or providing access.
Ransomware/extortion scenario
A staff member opened a seemingly innocent file attached to an email. The next day the stock order and cash registers started to malfunction, and business trade was stopped because of the network failure. The systems had become encrypted with a ransom demand of £10,000.
Case studies show that firms pay the ransom demands more often than thought but frustratingly still do not get their systems back. Instead, they receive more payment demands with their system and business operations still down. On the flip side, even once the ransom is paid, some criminals may open your systems back up and have the cheek to send you a guide on how not to be hacked again.
A Cyber Liability policy can provide cover for Business Interruption to cover costs for loss of revenue or profits in the event of downtime due to ransomware. Not only do Cyber Liability policies protect for this type of loss, but the policy will give access to IT experts who would handle any ransom requests and get your IT systems back up and running as soon as possible.
To help you understand what may occur and how having the relevant cyber policy in place may help.
Phishing scenario
A fi rm was the victim of a malware phishing attack. An employee had a pop-up on their computer after clicking a malicious link within an email. The pop-up stated the computer was infected and to call the number provided. Fraudsters then gained remote access to the employee’s computer by further deceiving the employee during the call.
Even with the best security technology and systems, your most vulnerable asset will often be your staff. Staff can be duped into surrendering passwords or providing access.
Ransomware/extortion scenario
A staff member opened a seemingly innocent file attached to an email. The next day the stock order and cash registers started to malfunction, and business trade was stopped because of the network failing. The systems had become encrypted with a ransom demand of £10,000.
Case studies show that fi rms pay the ransom demands more often than thought but frustratingly still do not get their systems back. Instead, they receive more payment demands with their system and business operations still down. On the fl ip side, even once the ransom is paid, some criminals may open your systems back up and have the cheek to send you a guide on how not to be hacked again.
A Cyber Liability policy can provide cover for Business Interruption to cover costs for loss of revenue or profits in the event of downtime due to ransomware. Not only do Cyber Liability policies protect for this type of loss, but the policy will give access to IT experts who would handle any ransom requests and get your IT systems back up and running as soon as possible.
Cyber risks can cause severe disruption to any company regardless of size and industry. Companies pay annual premiums to insure their buildings, stock and contents. However, cyber risks need to be a part of a company’s overall insurance and risk management programme, which includes:
Insuring your data from theft is just as important as your physical assets. Having the right cyber cover in place offers peace of mind and Reason Global can offer flexible solutions depending on your needs.
First published in Removals & Storage Magazine 2022.
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