Cyber Risk Insurance: Lessons from the latest high-profile hack attack

Lips No matter where you stand on the on the ‘extramarital dating’ debate; the recent hacking of Ashley Madison has taught us all one clear lesson: leaky cyber security can destroy businesses, reputations and lives. Cyber crime can be catastrophic to both businesses and individuals, and as we live more of our lives online we all become increasingly vulnerable.

Last year 800 million people worldwide had their personal data hacked, and the latest figures show that one in four Brits have had their identity stolen. For businesses the picture is just as bleak with 80% of big businesses and 60% of small businesses suffering a cyber breach in 2014.

Business is booming for cyber criminals and one thing is for sure: they won’t be going away anytime soon. As a result we are all being forced to take cyber security more seriously and companies are turning to cyber risk insurance to provide a financial safeguard against cyber security breaches.

Malcolm Marshall, Head of Security at KPMG, likens the battle between hackers and businesses to an ‘arms race’ lamenting that the ‘bad guys’ manage to stay one step ahead by ‘being more imaginative and more persistent’.

Tightening security and plugging leaks will deter opportunist cyber criminals, but it won’t stop determined hackers. If further proof were needed just look at what happened last year at Ebay (145 million email addresses stolen) Home Depot (56 million credit card details stolen) and Sony (47,000 employee details stolen). In every instance stock prices plummeted wiping millions off the value of some of America’s biggest companies.

Cyber risk insurance is designed to add a level of financial protection against a diversity of cyber threats, from providing compensation for fraud and identity theft to providing compensation for damage to your business’ reputation. Cyber risk insurance is a fast-growing sector and the Association of British Insurers estimated the market will be worth £6billion by the end of the decade.

To find out more about how Quoteline Direct can help protect your business visit our Cyber Risk Insurance pages or Tel: 0161 874 7979 to speak with a member of our commercial insurance team.






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