Sorry, you’ve been hacked!

Written by Simon Gilbert, Managing Director, Elmore Insurance Brokers Limited.

25/04/2016

The Risk of going Uninsured: Elmore research has found many businesses in Birmingham are running a great deal of cyber risk on their balance sheets. By effecting suitable cyber risk management, such as a robust cyber security framework, including penetration testing and effective threat detection through multi-layer monitoring, as well as suitable testing of incident response plans many cyber attacks can be stemmed from an early stage. An incident response plan, which considers not just business continuity and disaster recovery, but also easy to implement steps and pre-contracted responders, can make the difference between a disastrous impact to reputation and a positive outcome for the entity in question.

Elmore Insurance Brokers Limited advises its clients to actively manage risk to manage down premiums. Insurance is a partnership between businesses and insurers. This partnership can be significantly enhanced by focused engagement to understand and implement information security risk management best practice, which includes cyber insurance.

Cyber crime is the menace of the modern age, but how far have you gone to protect your business?

It’s not just about prevention, it’s about considering what is in place should the worst happen and your business is breached.

Criminals are becoming increasingly sophisticated about how they access data, with social engineering fraud and ransomware currently running rampant in the UK.

Social engineering involves misleading people into performing actions or divulging confidential information, such as tricking an entity by sending an email from an apparent trusted source to trick the recipient into sharing personal or financial information or clicking on a malware-installing link.

Ransomware is one of the most frequent types of hack seen in the UK, which involves infecting a computer with malware that encrypts files and demands that the user, to regain access, pays a ransom to the malware operators.

With both types of hack adding to a toxic list of IT security-breaching tactics, every business leader needs to make cyber and crime insurance company policy.

Bear in mind the subtle distinction between cyber insurance and crime insurance however. The latter tends to be about first party, direct financial loss, triggered by employee theft or fraud, extortion, fraudulent transfer instructions, electronic computer crime, or any other insured event.

Usually, a broad “cyber insurance” covers the costs in managing a cyber event, the interruption to a businesses profits/income including the increased costs in working, fines and penalties of regulators and card associations, ransom from extortion demands and the liability to third parties which result. This is why it is so important to ensure that a cyber insurance policy is paired with a crime insurance policy to ensure the different elements of the loss are covered.

A basic cyber insurance policy tends to cover.

  • Financial loss. Defence costs arising from data protection obligations
  • in respect of a regulatory investigation, and any data protection fines

    (where insurable by law) that the company is liable for in respect of

    such an investigation.

  • Liability. Against claims from affected individuals or businesses over
  • a failure to protect their information, or for financial losses from

    hacking, or damages from theft of identity.

    “As a vital part of a comprehensive programme, cyber insurance can cover more than just hacking,” says Simon Gilbert, MD and Founder of Elmore Insurance Brokers.

    “It is likely existing insurance will have elements of cyber cover but may not protect against the emerging crime risks which a serious cyber event can create.”

    If you are unsure how well your business is cyber protected, specialists, Elmore Insurance Brokers are on hand to analyse your existing cover to see if there are any ‘gaps’.

    “We go above and beyond to ensure clients get great results when they need them,” assures Simon. “We adhere to the highest professional and ethical standards, protecting client confidentiality while managing resources cost-effectively.”

    Written by Simon Gilbert, Managing Director, Elmore Insurance Brokers Limited.

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