As we move deeper into the digital sphere, our vulnerability to cyber-crime increases exponentially. South Africa is home to the third highest number of cyber-crime victims worldwide, and nothing emphasises the severity of the issue more than a recent statistic stating that annually, almost R2.2 billion is lost to cyber-attacks. To avoid becoming part of this shocking statistic, cyber liability insurance is an essential investment.
What is Cyber Liability Insurance?
Cyber liability insurance covers your company’s liability for data breaches where private customer information, such as credit card details, are accessed by individuals without the authority, nor the customer or company’s consent to do so.
How detrimental are cyber-attacks to businesses?
The digital arena is enormous, and no one is immune to the growing instances of cyber-crime. South Africa’s formal business sector is already highly dependent on digital platforms and as cybercriminals continue to push the boundaries of innovation, every time you engage with technology you expose yourself to the risk of cyber-crime.
Cyber-attacks are indiscriminate, targeting large businesses, small businesses and individuals alike. The cyber intrusions amount in huge financial losses and psychological trauma, as leaked information is a gross violation of privacy. It is estimated that, on average, victims will spend two working days dealing with the aftermath of the attack – even two days spent dealing with the after-effects can have a detrimental effect on your business. Whilst you might be able to recover from this trauma, your business will take much longer if you do not have the right coverage in place.
The attacks are disguised to appear harmless, but one wrong click can inflict immense damage and so it important to be aware of the many different forms.
Malware (malicious software) is intentionally devised to cause damage to a targeted computer in order to steal or encrypt data so that victims are forced to pay a ransom to the hijacker in cryptocurrency such as Bitcoin. Phishing involves a criminal attempt to trick unsuspecting individuals into opening a malicious URL or email attachment to steal their login details, which are then used to gain unauthorized access to the victims’ targeted accounts. Denial of service attacks overwhelm a web server with bogus traffic, and man-in-the-middle attacks trick the target computer into joining a compromised network.
Without coverage, these detrimental attacks will not only severely disrupt your business, but also threaten its ultimate survival.
Why do you need Cyber Liability Insurance?
Many organizations believe that their firewalls and anti-virus programs provide them with sufficient protection against cyber risks such as viruses and hacking. The shocking reality is very different: every day more than one million people and organizations fall victim to cyber-attacks, which is why every organization should have Cyber Liability Insurance cover.
Ensuring data mitigates the financial risks associated with losing data following a cybersecurity breach. Cyber liability insurance will cover:
- Investigation and incident response costs if a breach occurs
- Any necessary legal fees
- Notification costs
- Regulatory defence and penalties
- Cyber extortion
- Digital asset replacement expenses if anything is damaged
- Business interruption
The digitization of business endeavours and society as a whole is an unstoppable trend, so investing in the long-term growth and survival of your business means investing in cyber liability insurance. In 2016, the global economic impact of cybercrime was $450 billion, and yet insurers only wrote $2.5 billion in premiums for cyber insurance, resulting in significant residual exposure for both companies and individuals. Do not underestimate the severity of cyber-crime because forfeiting cyber liability insurance has far-reaching and detrimental consequences.
If you are a business owner thinking about the cyber aspect of your business insurance, then please get in touch with us and we will help you to the utmost of our ability. PLEASE NOTE: We will be closed on the 24th and 31st of December 2018. Please see our website for emergency contact numbers.