J001010 - Lycetts Newsletter Jan 2024 LR - Flipbook - Page 6
Lee Musgrove
Senior Account Executive,
Newcastle
W H Y C Y BE R
I NSU R A NCE IS
ESSE N T I A L FOR
E V E RY BUSI N ESS
Although cyber breaches involving large companies are widely reported in the press, it is
important to be aware that a 2023 Accenture cybercrime study found that 43 per cent of
cyberattacks were carried out on small businesses. This means that of the 2.39 million cases
of cybercrime a昀昀ecting UK businesses last year, over a million of those reported targeted
businesses employing between two and 50 people.
CHARITIES
Like any other business holding large amounts of
personal information, charities are vulnerable to
data theft, but when they rely on volunteers and also
aren’t perhaps able to appropriately fund IT
infrastructure and support, there is an even higher
risk.
THE ROLE OF CYBER INSUR ANCE
Of particular concern is that, in the event of a breach,
it is often not the financial loss of the breach itself
which causes the greatest impact. The inevitable
impact of a system being closed down for a period of
time, potential reputational damage and loss of
future income are all things to consider. The role of
the Information Commissioner’s Office (ICO) must
also be acknowledged as they can impose fines of up
to four per cent of turnover where the company has
failed to comply with data protection principles.
First, however, we will look at a few industry-specific
threats.
The most obvious role of cyber insurance is to cover
a business for the cost of a data breach, including
business interruption, reputational damage and
extortion. However, the benefits of cyber insurance
go beyond that.
•
From the outset, an insurer’s risk assessment
questionnaire can help you to scrutinise your
procedures to enhance your security posture.
Using their guidelines and taking time to ensure
your IT infrastructure is fit for purpose can help
towards compliance with the various regulations
around data security, which will stand you in good
stead with the authorities if a breach does occur.
•
In the event of a breach, you will have access to
expertise to manage the incident. This includes
immediate support following the detection of a
breach and the involvement of forensic experts to
determine what has been affected, how it can be
contained, repaired or restored.
•
Professional incident management ensures a
co-ordinated response to minimise the potential
impact faced by the business and gives access to
legal advisers who will help to mitigate potential
liabilities.
•
Cyber insurance can include the cost of notifying
data subjects who may be affected by a breach
and also covers the professional costs associated
with preparing for an investigation, insurable
fines and penalties imposed by the ICO.
PROPERTY OWNERS
Property owners are a prime target because they
hold a high volume of personal information with
stored documents and contracts, and regularly
receive digital payments. This makes them prime
candidates for identity theft where criminals use
personal information to forge documents or
intercept email correspondence in order to issue
fake invoices.
Another scam targeted at property owners is the
fraudulent listing of rental properties where payment
is extracted from the client without the owner ever
receiving the payment or being aware of a booking.
R E TA IL A ND W HOLE S A LE
When it comes to online retailing, it is tempting for
some to prioritise ease-of-use over security. These
businesses represent ‘low hanging fruit’ for criminals
who can use stolen personal details to hack into
customers’ accounts, use their bank card details to
purchase goods or to hold the retail business to
ransom, shutting down their operations altogether
until a payment is made.
06
Taking time to discuss your specific business
requirements with your broker to ensure that your
business is appropriately covered may help save you
significant inconvenience and cost in the long run.
