According to the 2013 Information Risk Maturity Index that was released by Iron Mountain and PwC. This report also pointed out the top 3 concerns businesses have if they were to suffer a data breach. These were customer and/or client loyalty, impact on the reputation of their organisations brand, and lost sales and revenue. The actual stats were:
60% – Customer / client loyalty
56% – Impact on brand reputation
46% – Sales and revenue
Let’s make this simple, irrespective of the size of the business if you have information that needs protecting then you have a risk. With the increasing, volatile trend of cyber attacks businesses have to address this issue at a board level and one clear point that can be taken from the above statistics is that all 3 are linked and you can’t have one without the other. If your customers don’t trust you or your brand then they will not do business with you.
90% of data in the world today has been created in the last 2 years (IBM Understanding Big Data – IBM Big Data Platform)
“With the vast quantities of data that businesses now hold, this automatically creates an increase to risk” said Scott Sayce managing director of Sayce Insurance Brokers Ltd. “From the businesses we speak to, there’s clearly a lack of awareness as to what risk transfer options are open to them to help protect their organisations should they be in the unenviable position of suffering from a data breach. But, what is of greater concern to us is that businesses falsely believe their current, traditional insurance products address all the risks associated with a data breach or cyber attack.”
Cyber insurance is an effective means of risk transfer and protects organisations regardless of size and will increase their overall IT risk management protection regimes. There are various types of cyber insurance policies, however, some of the coverage this type of policy can include is business interruption as a result of virus or hacking attack (which is excluded from the majority of traditional business interruption policies), crisis communication costs, brand protection, consequential reputation harm coverage, computer crime, telephone hacking, privacy liability and privacy breach notification costs.
Mr Sayce concluded by offering some thoughts and advice “a cyber attack or data breach can seriously impact an organisations ability to operate. This tangible threat must be addressed at board level with the appropriate action taken to protect its clients, brand and its own balance sheet. Our firm recommends that all businesses engage with a suitable IT security company to review their current IT and data security needs and put in place the correct form of cyber insurance to protect itself from a risk that’s not going away.”
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