The Prime Minister was asked recently what he believes to be the biggest risk to New Zealand businesses. His answer – cyber security.
What if your IT system is compromised or hacked, or your data is encrypted or locked down, and you are asked to pay a ransom to get it back? This is the reality of doing business in today’s high tech environment.
Are you prepared if your clients’ personal or financial information is taken through a cyber attack, or hacking? Do you have the systems or funds to put this right?
Cyber attacks are a growing worldwide war with no borders, and to keep on top of the hackers, companies have to keep up with them.
There are two major threats. The first is to individuals through scams, identity theft, or financial hacking. The other is to businesses, perpetrated by a group or individual who wants to cause major disruption to a particular business.
The recent high profile hacking of the Ashley Madison website has made the controversial website a poster child for cyber liability. The company that owns Ashley Madison, Avid Life Media, faces ‘absolutely catastrophic’ consequences.
Avid Life Media is already facing class actions in the USA and Canada. They stand to lose hundreds of millions of dollars in damages claims, by members who have lost reputation, suffered financially, or lost relationships. They are bringing claims primarily based on a breach of privacy law across jurisdictions.
Despite all the very best endeavours to protect the private information of clients and our businesses, it has been proven over and over again that no system is infallible. So what happens if the technology lets us down?
Cyber Liability Insurance protects you against liabilities arising from data protection laws, management of personal data and the consequences of losing information. For individuals, this includes credit card numbers, medical records, birth dates, passport numbers and other private personal information which can be stolen and used inappropriately.
Equally, the loss of corporate information such as intellectual property and proprietary information could severely disadvantage a business. With network attacks and security becoming a significant global issue, you can also cover for direct first party losses such as recovering lost or destroyed data, notification, monitoring and forensic investigation expenses and lost income.
Many of the policies available through your Abbott Broker include the following covers:
- Third Party Liability – related to privacy, personal information, corporate information, media and social media (including defamation, intellectual property rights and plagiarism)
- Hacker Theft Cover – fraudulent or erroneously paid funds
- Business Interruption – includes net profit or loss and extra expenses as a result of a network attack on an insured’s network
- Costs to Restore – research, replace, restore or recollect software and any electronic data due to a network attack
- Breach Consultation Services – legal, forensic and public relations assistance
- Breach Responses Services – notification services, call centre services, credit monitoring services and identity theft resolution services
- Public Relations Expenses
- Network Extortion Coverage – costs to avoid, defend or preclude extortion as a result of a network security failure
- Data Forensic Expenses – costs incurred to investigate, examine and analyse a computer network
Virtually all businesses invest in a reasonable first line of defence by way of firewalls and anti-virus software. While this is an essential step, effective risk management doesn’t stop there – firewalls are breached, viruses and malware find their way through. And as in the case of Ashley Madison, there are numerous opportunities for loss or even ruin when your data is stolen from other companies’ systems.
We encourage you to get in touch with your broker to discuss the level of cyber and technology-related risk present in your business, and how this can be effectively mitigated. We’re happy to help you understand what’s available and to tailor the right cyber insurance solution for your business.