How Can A Cyber Insurance Policy Assist?
In this article we look at some of the alarming statistics on cyber security attacks across the globe and two examples of a cyber insurance policy response following an attack.
Whilst cyber security focuses on preventing hackers from attacking your network and systems, cyber resilience is about the response and recovery after an attack has happened. We recommend that all businesses have a cyber resilience plan in place. Cyber insurance can play a key role in helping businesses respond to an attack and recover from it.
Alarming Cybersecurity Stats:
-Cybercrime To Cost The World $10.5 Trillion Annually By 2025 (cybersecurityventures.com)
-Malware increased by 358% in 2020 ”Malware increased by 358% in 2020 - Help Net Security
-Phishing attacks account for more than 80% of reported security incidents. Top cybersecurity facts, figures and statistics | CSO Online
-Google has registered 2,145,013 phishing sites as of Jan 17, 2021. . Phishing Statistics (Updated 2021) | 50+ Important Phishing Stats | Tessian
-Ransomware Victim Every 10 Seconds in 2020 (infosecurity-magazine.com)
-Netscout Threat Intelligence saw 4.83 million DDoS attacks in 1H 2020.https://www.netscout.com/threatreport
We look at two different cyber claims and the how the cyber insurance policies responded. In both cases the insurers were very quickly able to deploy a team of experts including IT forensic consultants, PR consultants and legal representatives.
Computer Virus - Cyber Policy Claim Response 1
Here is an excellent example from AIG NZ of their cyber insurance policy response to a virus infection on one of their client’s computer network. The insured is a professional services firm which operated a computer network comprising 22 desktop workstations, two virtual servers and ancillary devices including printers. Anti-virus software was up-to date and installed on servers and all desktop workstations.
Incident Overview
A virus infection was discovered on the computers and the insured’s IT service provider dispatched staff to assist. Initial attempts to eradicate the virus were unsuccessful. Eventually, the infection was eradicated by wiping and reinstalling all computers on the network. The insured incurred service costs and was unable to operate for several days.
Damage
The virus left the insured’s computer systems impaired, requiring clean-up work to restore normal operation. There was no apparent loss of data or privacy breach. The incident was contained by quick action in conjunction.
AIG Cyber Edge Data Crisis Response Team - AIG’s quick response time prevented subsequent reputational damage or harm. The insured may have missed business opportunities and income during the period of business interruption (three days).
Incident Costs
This incident was minor relative to many cyber claims, due in part to the speed of response. No legal or reputational costs were incurred, but costs related to data restoration and business interruption were still significant given the size of the company.
Costs Covered by AIG:
Restoration of data including fees for forensic partners: NZ $15,265
Estimated Network Loss: > NZ $20,000
Ransomware and Cyber Policy - Claim Response 2
In this 1 minute video story from Hiscox in the UK, their client was the victim of a ransomware attack via a cloud based server. The hackers were demanding crypto currency payment to release the company files. The affected company had 100 clients that could no longer access their data and confidential information was vulnerable.
The Insurer Response - The insurer quickly deployed a team to help, including an IT specialist to restore the data and prevent future attacks, a security consultant, a PR expert to manage communications with suppliers and legal representatives to provide guidance on the next steps.
The claim even covered the client’s loss of income as a result of the attack. Without the policy response the insured would have incurred significant costs to manage the situation and major disruption to their business.
Not all cyber insurance policies are created equal and the risks are continually evolving. The Insurely team are here to help. Insurely are fully independent commercial insurance brokers that tailor insurance programmes to your exact needs. Get in touch with us via our website, LinkedIn or Facebook