How to avoid voiding your cyber insurance
Cyber security is important but getting security systems in place to prevent an attack is only half the battle. Cybercriminals are constantly evolving and no matter how well protected you are, it only takes one wrong click to infiltrate your network. This means that, as well as having your defences set up, you also need to ensure that you have a plan should your business be affected by an attack in addition to having cyber insurance to protect against liability.
It doesn’t matter whether you run a small business or a large global enterprise, no-one is 100% safe from a cyber-attack. It was reported in Insurance Business UK that KP Snacks have been in the news confirming reports that they were the target of a ransomware attack on 28th January which disrupted their IT and communications systems, interrupting food production and distribution. According to the Cyber Security Breaches Survey 2020 nearly half of businesses (46%) and a quarter of charities (26%) reported breaches or attacks.
To properly protect your business, cyber liability insurance is a major step towards staying on your feet in the event of a data breach. But it’s important to make sure that your working practices are compliant with the terms of your policy to reduce any uncertainty when it comes to insurers paying up.
Here are some essentials to be aware of:
Insurers may require you to implement particular safeguards during the policy period to decrease the risk of data breach or loss. Failure to comply might void your coverage. Measures may include encrypting data, installing firewalls and security patches and following password protocols. Your broker will go through the clauses and conditions of your policy with you. Make sure to regularly review your activities with staff to make sure they’re in line with the small print.
- Misrepresentations or concealments
If you accidentally or deliberately misrepresented your data management procedures when arranging the policy, your insurer could attempt to argue that your cover is invalid. Unfortunately, they could refuse to pay out even if the misrepresentation was in a totally different area to the breach. From encryption procedures and data storage to back-up arrangements, make sure you’re open and honest with your broker, who’ll find the best cover based on the information you give them. If there are weak spots, they’ll be able to recommend risk-reducing improvements.