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Cyber Risks are an every business issue. Is your business CyberSAFE?

In today’s hyper connected environment every company irrespective of its size relies heavily on technology and connectivity to operate its business. Yes some will be more reliant than others but ask yourself this simple question, “What effect would there be on my business if our computer network security was compromised?”

 “In virtually every case the answer to this question is, there will be a financial cost. It could be lost revenue from being unable to sell goods or conduct the business, it could be damage to reputation arising out of a breach of confidentiality and possible liability associated with this or it could simply be there are significant costs associated with cleaning the network up and getting it back running again.” said Mark Jones, Head of Financial and Professional Risks for Crombie Lockwood.

The perception that Kiwis are safe and secure tucked away at the bottom of the world simply isn't true.

The exposure to network security issues and cybercrime is something that the New Zealand Government is taking extremely seriously with the Rt Hon John Key quoted as saying: “There are multiple kinds of threats and cyber harms. Victims can include anyone – from individuals or small businesses that lack the capability to address these issues, right up to large corporations.”

There is a plethora of surveys available, backed up by statistics that attacks on network security are dramatically increasing. Global security firm Symantec reports there were 439 million breaches of security in 2015, up 23% on 2014.

So the issue is a real one for every business. It is therefore vitally important that network security receives the appropriate attention when reviewing risk management procedures irrespective of whether the business is an SME or a multinational corporate.

A key part of any risk management strategy should be to consider Cyber Insurance. While an insurance policy cannot prevent a breach of your network security it can assist should you suffer one. Companies face very real liabilities if such data falls into the wrong hands or enters the public domain.

What is Cyber Insurance?

“Cyber Insurance policies are designed to fill the gaps in traditional insurance programmes that don’t respond to all aspects of insurable loss as a result of a network breach. They are generally multi-sectioned policies that will respond to both your own losses and also your liability to others as a result of a breach in your network security.” said Mark Jones, Head of Financial and Professional Risks for Crombie Lockwood.

The risks that can be addressed by a Cyber Insurance policy include:

First-Party Network Loss

Computer networks are at the heart of nearly all companies. Degradation or failure of these systems could halt day-to-day operations resulting in lost revenue and the cost to restore the systems can be significant. Network interruption can result from computer attacks, operational and administrative errors and virus transmission.

Cyber Insurance will respond to:

  • Loss of business income
  • Costs to restore the network
  • Costs to replicate/replace lost data

 

Privacy Breach and Security Liability

In the age of ‘Big Data’ companies collect and store data to help improve the customer experience but a side-effect of this data acquisition is the creation and storage of attractive and valuable information which can be of huge interest to financially motivated hackers. This data can be commercially sensitive or personally identifiable information.

Cyber Insurance will respond to:

  • Liability for third-party damages and associated legal fees
  • Regulatory fines and penalties
  • Public Relations costs
  • Costs to notify affected individuals and identity theft monitoring costs
  • Forensics costs

 

Cyber Extortion

Recent claims on Cyber Insurance policies show that there has been a significant increase in the use of Ransomware in New Zealand where files are encrypted until the ransom has been paid for the encryption key. This can take the form of a threat to delete or corrupt data, to take down access to a network or to disclose confidential information.

Cyber Insurance will respond to:

  • Payment of ransom demands resulting from a network security breach

 

One key benefit of carrying a Cyber Insurance policy is that it will provide you with 24/7 access to a response line that is supported by expert professionals. They will help you restore your network and minimise your exposure to loss and liability. Cyber Insurance response panels include lawyers, forensic experts, IT consultants, public relations firms, loss adjusters and other industry experts.

There are a number of insurance companies offering Cyber Insurance policies in New Zealand. “Crombie Lockwood is able to advise businesses which is the most appropriate insurance policy for them plus Crombie Lockwood has exclusive access to CyberSAFE which is a market-leading Cyber policy insured with global cyber specialists at Lloyd’s of London.” said Mark Jones, Head of Financial and Professional Risks for Crombie Lockwood.

Crombie Lockwood has also simplified the application process for businesses with under $10m in revenue. By just answering three simple questions an immediate and bindable quotation can be provided on the spot without prior referral to an insurance company.

Crombie Lockwood is an official partner of ConnectSmart a government initiative that advises SMEs about risks online and how to manage them. 

Contact us to make an enquiry about CyberSAFE for your business


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