According to a report by CSID (a leading provider of global enterprise level identity protection and fraud detection solutions and technologies) more than half of UK SMEs have no cyber prevention. Considering that in 2012, 50% of all cyber-attacks were aimed at businesses with fewer than 2,500 employees, and there are over 1.5 million victims of cybercrime every day, the risk to SMEs is high.

To demonstrate how easy it can be for cyber-attacks to happen, CSID created an online presence for a fake business called Jomoco and had employees ‘leak’ supposed sensitive information relating to the company. It took hackers around one hour to use this information to lock the social media and email accounts of the fake employees, as well as change the Jomoco website that had been set up.

A very real threat

Our client employs four people and makes kitchen furniture using two CNC machines, which involves the use of computers to control the manufacturing machines. The small business believed that it had adequate cyber security measures in place, including firewalls and an email policy but a third party managed to hack the business and install a ransom ware virus. This essentially denied the business employees access to its own computers and use of the CNC machines as a result.

Because the furniture company did not opt to include Cyber Liability as a cover on their insurance policy they were unable to make a claim. Instead they employed an IT company, who worked for two working weeks to resolve the issue. During these two weeks our client was unable to carry out any business at all.

In total the cyber breach is thought to have cost the company more than £8,000, including £500 IT costs and £7,000 loss of production costs plus time and stress.

For a premium starting from £371.00*, the company could have included Cyber Liability Insurance and would have benefited from a range of beneficial covers that would have minimised the impact this breach had. These include:

• Data breach notification costs - covers the cost of notifications following a data breach including legal fees, costs to send and administer notification communications, as well as the costs of call centre services to respond to any enquiries and queries.
• Cyber business interruption – covering the loss of business income resulting in total or partial interruption following a cyber-issue.
• Cyber extortion - covers expenses incurred by you and your business including the value of any ransom paid for the purpose of terminating a cyber-extortion threat.

In reality the cost of Cyber Liability insurance is not high when you consider the level of protection it can bring in the face of a disruptive cyber breach. If you would like more information on Cyber Liability insurance, our experts are on hand to offer helpful advice, please contact your nearest Jelf office or email cyber@jelfgroup.com

*Insurance premiums vary and are dependent on individual circumstances.

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