Companies unprepared for cyber attacks
13 May 2013
Channel Islands' companies are at risk of incurring significant expense dealing with the aftermath of a cyber attack.
As a UK government commissioned survey reveals the number of cyber attacks hitting businesses has soared in the past year and it is discovered that international cyber terrorists are specifically targeting Jersey, Rossborough is warning companies that they are potentially under insured to deal with the aftermath of an attack.
'Cyber criminals are becoming increasingly sophisticated and companies are more at risk than ever of having their cyber security compromised,' said managing director of Rossborough Jersey Clive de la Cour.
'Keeping electronic information safe and secure is vital to a business's bottom line and no sector is immune from attack. The information that every company has stored can have a financial value and companies shouldn't underestimate the cost of rectifying an attack.'
Mr de la Cour said that there is a misconception that traditional liability products address internet exposures but that liability for loss of customer or employee data is not typically covered under a corporate insurance policy.
'Some existing business insurance policies that offer general liability and director and officer liability may provide a measure of coverage for those areas but most companies will only discover if there are any gaps in what is and what isn't covered after an attack,' he said.
'For a company operating in today's high-tech world, computer networks provide numerous services including internal and external email, with file transfer capabilities, and every company has a website supplying information about the company, its products and services, and possibly e-commerce. It can be as simple as a password of insignificant strength to open a door to hackers.'
The Information Security Breaches Survey, commissioned by the Department for Business, Innovation and Skills (BIS), found some of the incidents caused more than £1 million of damage. The survey showed 87% of small firms experienced a security breach last year, which was a 10% increase on 2011, and 93% of large organisations had also been targeted. Affected companies experienced 50% more attacks on average than a year ago.
'Businesses can protect themselves in the event of a cyber attack. Cyber Liability Insurance coverage offers cutting edge protection for exposures arising out of all forms of electronic communications. It addresses the first and third-party risks associated with e-business, the Internet, networks and informational assets, and can be built on a modular basis to suit any business's needs,' said Mr de la Cour.
Areas of cover that businesses should consider include; Multimedia Liability, covering liability in the event of being sued as a result of information provided through a website, such as breach of copyright, libel or slander. Security and Privacy Liability, for data breaches that result in being sued by affected customers, covering legal costs and any damages awarded. Crisis Management Costs insurance, for costs in the event of a breach such as notifying affected customers, offering credit monitoring, setting up call centres for concerned customers, and bringing in forensic teams to ascertain the reason for the data breach and potentially remove a hacker from systems.
Data Recovery and Business Interruption insurance, covering costs incurred to restore affected data, or lost revenue as a result of a data breach. Regulatory Defence Costs, for legal costs to comply with any regulatory action taken following a data breach, and Cyber Extortion insurance, covering costs that may be incurred in the event a hacker stealing data from systems and then demanding a ransom to avoid leaking the information.
'A few years ago, cyber insurance was expensive, but the market is moving and the prices are falling as insurers understand more and more the risks involved. It depends on what the client is doing, their database and profile, but we can't stress how vital it is to ensure cover is in place to protect if the unexpected happens,' said Mr de la Cour.