As digital threats grow, cyber-crime insurance has never been more important

As one of the fastest growing crimes in the world cyber-crime can strike anytime, anywhere and on any device. Fraud and identity theft, phishing, data breaches, malware and more continue to make news headlines. Cyber-crime insurance is designed to help organisations manage this risk. 

As one of the fastest growing crimes in the world cyber-crime can strike anytime, anywhere and on any device. Every week, news headlines feature well-known brands uncomfortably admitting their organisation has been the target of cyber-attack. Fraud and identity theft, phishing, data breaches, malware and more make the headlines.

Statistics abound around cyber-crime. Cyber-crime is estimated to have cost New Zealanders $14 million in 2018. Malicious hackers are attacking computers at the rate of one every 39 seconds[1]. 63 per cent of network intrusions are the result of compromised user names and passwords[1]. The most frequently occurring cyber-crime incidents reported in New Zealand are related to phishing and stolen user names and passwords.

And while it is easy to think that only criminals are driving cyber-crime, the reality is that human error and technology issues are healthy contributors too. IBM and Ponemon’s Institute Cost of a Data Breach report reveals that while 48 per cent of data breaches are caused by malicious or criminal actions, 27 per cent are caused by human error and 25 per cent by system glitches.

The stark truth is that more people are managing more information, and more money, than ever before across the internet. An even more stark truth is that no organisation, or individual, that uses the internet is safe from cyber-crime.  

What is cyber-crime insurance?

Cyber-crime insurance is designed to help organisations manage risk by offsetting expenses and financial losses to a business, customers or other parties following a cyber incident. Policies typically provide coverage for a range of internet-based risk and risk that is specific to information technology infrastructure and systems.

Most policies incorporate first-party and third-party coverage. First party coverage protects against losses experienced by your company directly. For example, repairs to IT infrastructure caused by a hacker.

Third-party coverage helps protect against claims to your organisation by people who have been damaged or hurt by your actions or failure to act. For example, claims by a supplier against your business for breach of privacy in the event that supplier’s information was leaked in a data breach and shared elsewhere online.

Do you need cyber-crime insurance?

Any organisation or individual that runs a website, uses computers and other internet-enabled devices in their business or holds information electronically is vulnerable to cyber-crime or data breach.

If this sounds like you, the answer is simple: you need to consider cyber-crime insurance to protect your assets, information and reputation. 

When it strikes, cyber-crime can have many serious implications. The cost of paying ransoms, repairing, unlocking or replacing infrastructure has potential to become significantly expensive. The time needed to identify, and report, details of cyber-crime and respond to legal claims from customers, supplier and employees can be long lasting. Increasingly businesses need pause, or stop, operations to work through the fallout from cyber-crime.

Reputational damage can extend over years. Loss of unique intellectual property and customer data can be devastating. And as more governments globally introduce legislation to govern the protection and privacy of personal data, statutory fines are becoming more common.

Getting started

There’s no doubt cyber-crime is becoming more sophisticated. Which is why cyber-crime insurance policies have many potential coverage points to consider. Insurance coverage spans liability protection for data losses, extortion, lost income, notification costs, network security and privacy, electronic media and much more.

We appreciate the coverage possibilities can seem overwhelming. Our brokers are impartial experts, with up-to-date knowledge on the best cyber-crime insurers in the market and extensive networks to provide you with informed options.

Don’t become a cyber-crime statistic. Talk to a NZbrokers member  to explore the steps you can take to design a policy that protects your business, data and reputation from cyber-crime.