Cyber liability insurance can be defined as policies which cover a business against liability for a data breach in which information is exposed or stolen by a hacker who has gained access to a firm’s network. The policy covers expenses associated with data breaches such cost of notifying clients, fines, penalties and losses resulting from data theft. The policy also covers business interruption, computer fraud, funds transfer loss and cyber extortion.
In Kenya, a good number of people have a negative attitude towards insurance most probably due to bad past experiences by either themselves, friends or family. This explains the low insurance uptake. However, this trend is changing as more and more people realize the need for an insurance cover to protect themselves against uncertainties. With the advance in technology and higher internet penetration, businesses just like people have become reliant on the internet for their day to day work a good example being banks, telcos, hospitals among others.
This increased use of the internet by businesses has given rise to a new risk, cyber risk. This risk is perpetrated by hackers who are basically, individuals who uses computers to gain unauthorized access to sensitive data with the sole aim of committing a crime. The hackers have so far led to losses worth billions of dollars worldwide. In Kenya an ICT security survey conducted by Kenya National Bureau of Statistics and Communications Authority of Kenya (CA) indicated we lost about Sh18 billion ($175 million). This shows that the threat of cyber-attacks is very real and is here with us. Which is why all businesses big and small which conduct any of their business online should get themselves a cyber liability insurance cover.
Here are a few reasons why businesses should get cyber liability insurance.
The traditional insurance covers don’t cover the loss of data due to a cyber attack yet data is one of our most important assets. If say a bank is hit by a cyber-attack, the consequences could be very costly. However, with a cyber liability cover you are covered against the consequences of a data breach.
For any business, computer systems are very critical to the day to day running. However, their downtime is not covered by the traditional insurance policies. The cyber liability insurance covers system downtime that is usually occasioned by a cyber-attack.
Depending on the cover, cyber insurance can cover the cost of regulatory fines, litigation, reconfiguring networks, reinstating system security and restoring data. For a business without cyber insurance, costs surrounding a cyber-attack can prove costly.
In the event of a cyber-attack, everyone affected will need to be notified in a way that restores faith in the business. This commonly referred to as reputation management which is a costly affair. Cyber insurance can cover the cost.
Once a business has been attacked, there is a need to call in cyber risk specialists. These specialists are usually not cheap as already there is a global shortage of such specialists. Cyber insurance can help you cover the cost of hiring such specialists.
Any part of a computer system is bound to be expensive. In the event of a cyber-attack, cost of repairs to the affected hardware can prove to be expensive. A cyber insurance cover can cover the cost of the replacement.
If run a business which has computer systems, it is wise to get a cyber liability insurance cover as it is not a matter of if but when you will be attacked. Be preemptive and protect yourself from the losses that would result from a cyber attack by get yourself a cyber insurance cover. Aon Kenya recently launched a cyber liability cover, get yourself one before it is too late.