My IT provider will handle that… possibly?

Human errors are still the primary cause of cyber insurance claims, which in turn provide opportunities for cyber criminals to increase attacks. These digital offenders have no morals and seize on any  potential system vulnerabilities that come from the hybrid working model such as making security measures more complex and increasing the number of targets for attack. This model could create a great opportunity for a cyber-criminal to push various cyber-attacks. The result being s large financial losses for the business under attack, plus  hours of precious time and resources lost and diverted to dealing with these incidents. We’re seeing the result of this with reports of cybercrimes continuing to increase.  

As time goes on, cyber-criminals have become more and more inventive. For example, I’ve heard of an attack on a private school where the parents were contacted with a supposed government link to submit their bank details, advising them they would be reimbursed for school meal costs. This was picked up just in time, but the Information Commissioner's Office, external (ICO), detail 347 cyber incidents being reported in the education and childcare sector in 2023 – an increase of 55 per cent on 2022. There are many other renowned cases, such as the issues with NHS cyber- attacks causing over a thousand operations to be postponed. A cyber-attack even caused the beer production line for Duvel to grind to a halt. 

With these mounting statistics, you should believe cyber insurance is as essential as a “dry” contingency plan for a sports day in case of rain during a British summer. But in fact, it’s still an uninsured risk for many companies. 

Aside from the “it will never happen to me” response, which is the most common response, the next is:

“My IT department/provider will handle anything we have to encounter”

Now, while I accept your IT provider/department will have provided assurances about how they can assist with recovery of systems and the strength of firewalls that you have in place, you should consider the following:

• Companies are ten times more likely to face a cyber event than a fire
• The majority of claims come from human error (clicking on links in emails, sending data to wrong recipients, etc). cyber protection is insurance against “gaps” in your human defences and computer firewalls.
• Does your IT consultant have extensive experience in handling cyber incidents? Insurers have a dedicated in-house team with a 24/7 response who will handle any notification.
• Do you have multi-factor authentication in place? This should have minimal cost impact but will dramatically enhance your ability to purchase cyber cover as well as helping you reduce your exposure to cyber-attacks.

Taking the handling of claims scenarios further, ask yourself the following key questions

• Would the IT consultant/department have Bitcoin readily available to pay ransomware? (sometimes it’s best to pay as the virus/cyber criminals may turn very aggressive, so an experienced broker can help you navigate these scenarios)
• Are they able to contact the authorities to check if a payment of ransomware is not to a hacker that is part of a sanction group/entity?
• Are they well-versed in handling data breach notifications? Do they have a working relationship with the ICO and understand the various requirements of GDPR.
• Would any additional services from your IT provider/department to help with a hack/breach be capped within your current agreement or is this additionally chargeable?
• If you lost your systems for 48 hours, what would the cost be to your business? Think worst case scenario, not best. Hackers will target you at a crucial moment to extract maximum effectiveness.
• How often do you back up your data? If the hacker sits their malware into the system dormant for three weeks to corrupt numerous backups. How quickly could your IT consultant/department find the “clean” version and reinstate, and could they recreate and make up for the lost weeks?

This is not me trying to discredit or devalue your IT provider/department. I see insurance as something that works in collaboration with their services. But I’d encourage you to ask them the questions posed above. 

So, here’s the thing.  A cyber-attack will never happen to you – until it does. It’s a daunting prospect no-one would want to face alone and unprotected, so having a helping insurance hand to guide you and work alongside your IT consultant/department will be the source of light in the dark and complex world that a cyber wrongdoing may bring.

So rather than wait to get caught in a digital firestorm, let the cyber insurance experts at Howden help you assess your potential cyber risks, provide support to address those risks, and find the right cover to safeguard you from hidden hackers. Reach out to us today to find out more.