Cyber-attacks are growing in frequency and sophistication across all industries resulting in rising cyber-losses. As a result, policy holders are likely to experience higher cyber-liability insurance rates, due to an increase in events claimed for. The global cyber insurance market is expected to grow to a value of £6.83bn in 2021, representing a 21% increase compared to 2020. This is based on the greater awareness and understanding of cyber threats. Furthermore, the increase in employees working from home as a result of the COVID-19 pandemic has left them more vulnerable to cyber-attacks. This has made cyber-liability insurance of significant importance for both individuals and organisations.
Trends to watch out for:
As cyber-risks grow, most property and liability policies will have exclusions for cyber-exposures to avoid unexpected losses. Therefore, it is critical for organisations to carefully review their existing policies to see if they will be covered against cyber-attacks. Getting a standalone cyber-security policy could protect you from the major losses associated with cyber-attacks.
Remote work exposures
The COVID-19 pandemic and subsequent lockdowns meant that many employees across all industries had to transition to working from home. For most, this was likely the first time they had worked from home, especially for any significant length of time. Unfortunately, this resulted in increased vulnerability and a rise in cyber-attacks. Employees were largely targeted via phishing attacks and Business Email Compromise (BEC). There are two key reasons for this happening. The first reason is that individuals do not typically have advanced cyber security in their homes. The second reason is that many people do not know how to detect a phishing email or other forms of cyber-attacks before it is too late.
Ransomware is malicious software that infects a computer. It then either prevents the computer from working or prevents access to certain files until a ransom is paid. The number of ransomware attacks has risen over the last few years meaning organisations need to be more vigilant. Of specific concern is double-extortion ransomware which can result in both your system being compromised and the attacker threatening to release sensitive information to the public. Due to the rising number of attacks, some insurers have revised or restricted cover relating to ransomware policies. This could mean that you are not covered for what you thought. If this is the case, you may need to take out a separate standalone cyber-liability policy.
A multitude of international and domestic jurisdictions have recently established new data protection laws. These are aimed at increasing responsibilities and compliance considerations for organisations that handle sensitive data. This means organisations must be more actively vigilant in preventing cyber-attacks and must also educate their employees on how to recognise them.
The advanced technologies that organisations have access to has enabled most employees to successfully telework through the pandemic. However, despite making many operations easier and more efficient, technology can also result in increased vulnerability to cyber-attacks. This makes it important to have cyber security and insurance measures in place.
Why do you need Cyber Insurance?
Cyber insurance should not be seen as a luxury, but a necessity. COVID-19 has put some organisations under economic strain, leading them to forego adequate cyber-security. The increasing use of technology across all sectors means companies are exposing themselves. The increasing risk of attacks, and the significant losses associated with them, makes uninsured organisations vulnerable.
Cyber insurance can cover you for:
- Loss of or damage to Digital Assets
- Loss of Third-Party Data
- Cyber Extortion
- Business Interruption from Network Downtime
- Investigation and Defence Costs
What you can do to protect your organisation
- Work with a professional insurance broker to understand the type of cyber-cover you need to have in place to protect your organisation. Standalone cyber-liability insurance can offer you protection should the worst happen.
- Utilise security services offered by insurance carriers and third parties to strengthen your security measures with expert assistance. They may also be able to spot potential risks or weaknesses in your system before an attack occurs.
- Focus on employee training to spread awareness regarding the commonality of cyber-attacks and educate employees on how to detect potential cyber-attacks before they affect your organisation.
Click here to read The National Cyber Security Centre’s guidance on Cyber Insurance.« Back to all news