Like any modern business, you probably rely on technology for everything from talking to your clients and storing their data through to accepting their payments. But if your systems were to fail because of a malfunction, cyber-attack or service outage, could you continue to operate in the meantime? If not, how long could you survive before you started losing revenue?
According to the Insurance Council of New Zealand, 60 percent of all cyber-attacks are aimed at small-to-medium-sized businesses. Real New Zealand examples provided by the government initiative Connect Smart and news outlet Stuff include:
· A real estate agency who had their entire system encrypted by the cryptolocker virus. It cost them $6,000 to unlock their data.
· A funds management company who released $85,000 to someone who had hacked one of their client’s email accounts, $40,000 of which was unrecoverable.
· An e-commerce website which suffered a technology breach that cost the parent company over $4 million.
· A ransomware attack prevented an engineering firm from using their email or network drives. While the issue was solved in just eight hours, the cost of the attack still came to $18,500.
In 2015, New Zealand businesses collectively lost $257 million to cyber attacks. Internet security company Symantec reported that our country was subjected to the second-highest number of ransomware attacks in the southern hemisphere. Around the world, there are an average of 4,000 attacks each day, according to the FBI. A compelling visual example is available on this map provided by threat intelligence network Norse, which shows attacks happening in real time.
Consider how your business would cope financially if you were to be the victim of digital disruption. How would you deal with the costs of retrieving data, repairing networks, ransomware extortion, notifying clients of data breaches, PR to deal with reputational damage, downtime, privacy compensation claims and investigations, and legal costs? Research reveals that many businesses are unable to absorb these expenses. In fact, the US-based National Cyber Security Alliance conducted a survey which found that within six months of a cyber attack, 60 percent of small businesses failed.
If your business would struggle to cope with the financial effects of a cyber disaster, cyber insurance is the answer to keeping you afloat. A cyber insurance policy can provide you with the funds to assess the scope of a cyber event, repair the damage, and cover lost revenue and other associated costs.
If you don’t have cyber insurance, or you are concerned your current cover may not be appropriate, contact one of our experienced business insurance brokers for expert, personalised advice.