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Cyber Liability
What is Cyber Liability Insurance?
Cyber Liability Insurance provides protection for businesses against the financial losses, legal liabilities, and reputational damage caused by cyberattacks, data breaches, and other IT-related incidents.
What are the coverage areas?
It is designed to cover the costs associated with responding to a cyber event, including legal fees, regulatory fines, customer notification, system restoration and public relations management.
- Covers the cost of responding to a data breach, including notifying affected customers, providing credit monitoring, and hiring legal and technical experts to mitigate the damage.
- For example, if a hacker accesses customer information from your servers, the policy would cover the costs of notifying those customers and taking steps to protect their data.
- Protects against ransomware attacks, where a cybercriminal demands payment to release control of your systems or data. The policy covers the cost of negotiating and paying the ransom, as well as the costs of restoring systems.
- Ransomware attacks are increasingly common, and having cover ensures you can quickly recover your data without significant financial loss.
- Provides compensation for lost income if a cyber event causes a significant disruption to your business operations. This may include downtime due to a system outage, website hack, or other IT failure.
- For example, if your e-commerce website goes down due to a cyberattack, the policy would compensate for the revenue lost while the site is offline.
- Covers claims made by third parties (such as customers or suppliers) who suffer financial loss due to a breach in your network security. This may include the spread of malware from your system to theirs or the failure to prevent unauthorised access to confidential information.
- If your system is compromised and causes a supplier’s system to be infected, this cover would respond to any claims made by the supplier.
- Covers the legal costs and potential fines imposed by regulatory bodies (such as the ICO in the UK) due to failure to adequately protect customer data under data protection laws, such as GDPR.
- Fines can be significant if your business is found to have violated data protection laws, and this cover helps mitigate the financial impact.
- Provides access to public relations experts to help manage the reputational damage caused by a cyber incident, ensuring that your brand and public image are protected.
- A swift, well-handled PR response can be critical in maintaining customer trust after a data breach or cyberattack.
- Covers the cost of hiring forensic experts to determine how a breach occurred, what data was compromised, and how to prevent future attacks. These investigations are crucial in limiting damage and restoring normal operations.
- Forensic reports also provide the evidence needed for any regulatory or legal defence.
- Protects against claims of libel, slander, copyright infringement, or defamation arising from content on your website, social media, or other digital platforms.
- This could include a claim if your business is accused of defamation due to comments made online by an employee or through advertising content.
- Covers losses resulting from cybercrime activities such as fraudulent fund transfers, phishing attacks, or other types of financial fraud involving your IT systems.
- For instance, if a staff member is tricked into transferring funds to a cybercriminal posing as a legitimate supplier, this policy would cover the loss.
Insurance With A Purpose
Key features:
First-Party and Third-Party Cover: Cyber liability insurance usually provides both first-party cover (protecting your business) and third-party cover (protecting others affected by a cyber incident involving your business). This ensures that both your organisation and those you do business with are protected.
GDPR Compliance Support: In the UK, compliance with the General Data Protection Regulation (GDPR) is essential. Cyber insurance policies often provide specific guidance and support to help businesses meet their GDPR obligations and cover the costs of defending against non-compliance claims.
Incident Response Team Access: Many policies give immediate access to an expert incident response team, including IT specialists, legal advisors, and public relations consultants, to help manage the fallout from a cyberattack and minimise damage.
Worldwide Coverage: Many policies include worldwide coverage, protecting your business against cyber incidents that occur outside the UK, which is essential for businesses operating in global markets or dealing with international customers.
Benefits:
Financial Security: Cyberattacks can be extremely costly, especially when considering business downtime, regulatory fines, and ransom payments. Cyber liability insurance provides financial protection against these potential losses.
Risk Mitigation: Many insurers offer proactive risk management tools, such as vulnerability assessments and training for employees to reduce the likelihood of a cyberattack. This helps businesses protect themselves and reduces the risk of claims.
Legal Support: If your business is subject to legal action as a result of a cyber incident, the policy provides access to specialist legal advice and covers the associated legal costs.
Customer Trust: In the event of a data breach, how you handle the situation can significantly affect customer confidence. Cyber liability insurance ensures you can respond effectively, helping to maintain trust and protect your reputation.
Compliance Protection: Ensures that your business is covered for any regulatory breaches, such as failing to protect customer data under GDPR. This reduces the risk of severe financial penalties from regulators.
Key Considerations:
Policy Exclusions: Cyber liability insurance may exclude certain types of incidents, such as those arising from intentional acts by employees or pre-existing vulnerabilities that were not addressed. It’s important to review your policy for any exclusions.
Policy Limits: There are limits to the amount an insurer will pay for a cyber incident, both in terms of overall cover and for specific areas such as business interruption or ransom payments. Make sure these limits are sufficient for your business.
Employee Training: Cyber incidents are often the result of human error. Implementing regular cybersecurity training for employees can help prevent common threats such as phishing or ransomware attacks, potentially lowering your premiums.
Regulatory Environment: In the UK, businesses are required to report certain types of data breaches to the Information Commissioner’s Office (ICO) within 72 hours. Failing to meet this obligation can lead to heavy fines, so it’s crucial to have appropriate procedures in place.
Cybersecurity Measures: Having strong cybersecurity practices in place, such as firewalls, encryption, and multi-factor authentication, not only reduces the risk of an attack but can also lower your insurance premiums.
Choosing a Cyber Liability Insurance Provider:
Industry Experience: Choose an insurer with expertise in your industry, as different sectors face different cyber risks. For example, a healthcare provider may need different cover compared to an e-commerce business.
Claims Handling Reputation: A quick response is crucial when dealing with a cyberattack. Choose a provider with a reputation for handling claims efficiently and providing fast access to incident response teams.
Customisable Policies: Look for policies that can be tailored to your specific business needs, such as including cover for regulatory fines or extending business interruption cover if you rely heavily on digital systems.
Speak to our Cyber Insurance
Expert Advisor
We understand the importance of having easy and accessible ways to get in touch with us. That’s why we’re excited to offer you a way to connect directly with our Senior Team quickly and conveniently.
Nicola Wyatt
Senior Insurance Practitioner
