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Do all businesses need cyber risk insurance?

Date: 16/05/2022 | Written By: Karl Hodson

Cyber security insurance – how to protect your business against cyber attacks

The short answer to the above question is ‘yes’. But here’s why…

The scope and complexity of cyber security threats continues to grow with every week that passes, and no company or organisation can consider themselves inherently immune from these threats.

As a business, you may be fortunate enough to have avoided any serious problems with cyber security issues to date, but that does not mean that run will continue. Indeed, the odds are that sooner or later you will be faced with a significant data or cyber security problem to contend with, which of course is where having cyber risk insurance becomes invaluable.

Increasingly valuable resources

It is no secret that data resources are becoming increasingly valuable and integral to the operations of businesses across industries and throughout the world. Put simply, businesses are relying more and more on technology and data systems of various kinds to function routinely and to develop their services.

Among the consequences of these dynamics is an increase in the potential impact that a successful cyber attack can have on a business.

Whereas in the past, the ramifications of a cyber attack might have been easy enough to isolate and remedy, the interconnectedness of systems and the tech-heavy way in which most organisations now operate means that successful attacks can be enormously damaging.

Operational and reputational risks

Contemporary cyber attacks can take many forms from ransomware to hacking, and from phishing to malware. Sometimes they will result in sensitive data being lost, which can then become a legal matter if a company has failed to secure data they were obliged to keep safe. Alternatively, an attack involving ransomware, for example, can see a company’s entire tech infrastructure compromised and their systems rendered inaccessible, which inevitably creates a huge amount of operational disruption.

In addition to the practical consequences in the short or medium term of falling victim to a cyber attack, there are also longer-term reputational risks to consider. The way the world is right now means that consumers and potential customers of businesses take data security issues seriously and developing a reputation for poor data management or cyber security can be highly damaging from that competitive perspective.

Getting the right insurance

There are different types of cyber risk insurance, or cyber liability insurance available to businesses in different industries and it tends to be important for policies to reflect the specific needs of a given organisation.

However, with the right guidance, information and support, there is no reason why any business shouldn’t be able to get a tailored cyber risk insurance policy that reflects precisely what their risks and requirements are in these contexts.

Inevitably, as organisations and cyber threats continue to evolve, so their cyber risk insurance policies too will need to adapt and reflect new realities as closely and meticulously as possible.

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