Cyber insurance for tech businesses is now a must
The numbers of cyber attacks, malware, extortion and data thefts are increasing exponentially every year and even “offline” businesses are being affected.
If you’re a tech business you may think that your security measures and those of your partners and suppliers have sufficiently reduced the risk of virtual crime, such as defacement, DDoS attack, malware, hijacking, data theft and blackmail, so that you don’t need to insure for possible losses. But consider:
- The average cost of a cyber attack, per company, in Australia in 2014 was almost $4m (www.statista.com)
- 43% of US companies experienced a data breach in the last 12 months (Ponemon Institute – USA Today)
- Information security incidents increased by 48% in 2014 over the previous year (Global State of Information Security Survey 2015)
The reality is that while cyber criminals are becoming increasingly sophisticated, the tools of cyber crime are now largely accessible to anyone who knows where to look. And as business moves from the real to the virtual world crime is moving into the cloud too.
Cyber insurance cover is available in New Zealand and should be considered by any business that relies on any form of information technology. This includes web and mobile applications, SaaS, other cloud-based services, electronic data storage, communication, transaction and payment processing.
It’s not just tech companies that are vulnerable, other sectors at significant risk include utilities & energy, manufacturing, retail, financial & professional services, public services, education, consumer products and healthcare.
What is Cyber insurance?
The term “cyber liability insurance” is often used to describe a range of covers:
- Data breach/privacy crisis management cover. For example, expenses related to the management of an incident, the investigation, the remediation, data subject notification, call management, credit checking for data subjects, legal costs, court attendance and regulatory fines
- Multimedia/media liability cover. Third-party damages covered can include specific defacement of website and intellectual property rights infringement
- Extortion liability cover. Typically, losses due to a threat of extortion, professional fees related to dealing with the extortion
- Network security liability. Third-party damages as a result of denial of access, costs related to data on third-party suppliers and costs related to the theft of data on third-party systems.
When I’m not blogging for TaurangaTech I work in the insurance profession, so if you’d like to discuss how cyber insurance could apply to your business feel free to get in touch with me.