Last month, BBC News led with the headline “Firms buy insurance ‘in mad panic’ as cyber-attacks soar”. Sovereign Insurance Services, located in Ocean Village has confirmed that this international trend is being replicated here in Gibraltar.
Estimated annual losses from cyber crime now top £291bn, according to the Center for Strategic and International Studies and the cost in lost productivity of last year’s WannaCry ransomware attack alone was estimated at $4bn.
Gibraltar businesses have already been on the wrong end of cyber attacks with some companies have been duped into paying monies to fraudsters. The attacks are becoming more sophisticated each day. The loss to a company can be financial or reputation, usually both.
Neil Entwistle, managing director of Sovereign Insurance explained what it’s all about. “Cyber and Data Loss insurance (Cyber Insurance) is fast becoming a ‘must have’ cover for any business that retains personal client data (financial or otherwise) within its computer systems. Loss of such data or release of it, to the outside world through error, negligence or the criminal acts of employees or third parties, could result in serious financial loss to the company. These exposures can be insured through the multitude of insurance policies that have become available in the current insurance market. The problem for most companies is to understand what coverage is available and how best to access the right insurance products to protect the potential data loss position that all companies are potentially exposed to.”
One such company taking out cyber insurance with Sovereign is Chestertons. Tim Benson, Chestertons’ Business Development and Commercial Director stated, “We were ever mindful of the increasing cyber attacks around the world and conscious of the new strict regime coming into force in May 2018 which forces all companies to better manage their client data. We believe the exposure to an attempted cyber attack is more likely than a traditionally burglary, yet we wouldn’t ever consider not insuring our physical business assets.”.
Indeed, the regulations governing data protection are becoming more onerous with businesses increasingly responsible for securely protecting information contained within their computer systems. Under the new General Data Protection Regulations “GDPR”, from May 2018, companies will face heavy fines if their systems are breached and sensitive client data is accessed by unauthorised third parties.
Cyber Insurance covers the losses caused by damage to, or loss of information from, IT systems, networks and electronic records. Policies are designed to protect businesses, or individuals in certain circumstances, from internet-based risks, which can cause financial or reputational losses.
“After meeting up with Sovereign, a Lloyds underwriter assessed our risks and we were very happy with the quote for cyber cover so had no hesitation in adding cover to our range of insurances” said Tim.
Neil added “With Gibraltar moving deeper and deeper into blockchain technology and fintech generally, and the near daily news of another hack, we have experienced a significant increase in interest in our range of cyber policies. From the large gaming companies hosting personal details – including credit card information, to healthcare companies hosting personal sensitive data and to the lower risk companies with minimal personal information but who still want to do the right thing and have cover for losses that might arise if personal data was stolen and mistreated”.
According to the BBC report, Ransomware attacks, whereby criminals break in to your network, encrypt all your data, then demand money in return for the decryption key, are particularly virulent.
There’s the old saying, “watch out watch out there’s a thief about”. That thief is now online and could be anywhere in the world.