Cyber Threat Crisis? What Cyber Threat Crisis?

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06 May 2016 | Updated 01 January 1970

While businesses state that Insurance against cyber attacks is ‘vital’ only 41% are covered for both security breaches and data loss.

The findings are according to the 2016 Risk:Value report looking at attitudes to cybersecurity and risk from NTT Com Security, the global information security and risk management company which also reported that just over a third of businesses have dedicated cybersecurity insurance.
Research among 1,000 non-IT business decision makers in organisations in the UK, US, Germany, France, Sweden, Norway and Switzerland reveals that one in 10 (12%) have no insurance cover at all for either eventuality. This is despite most business decision makers admitting that there is an increased cyber security threat and that the cost of recovering from such an attack could start from around £1.2 million.
While cyber liability insurance has become increasingly popular and can include cover for data/privacy breaches, extortion liability and network security liability, only 35% of businesses currently see the need to take a policy out, although a further 43% are getting one or thinking about it. Businesses in the USA are most likely to have this type of insurance – 51% compared with 26% in the UK. Notably, wholesale organisations (43%) are most likely to take out dedicated cyber insurance, together with business/professional services (43%) and utilities companies (39%).
Less than half (46%) of those respondents whose organisation has company insurance that covers data loss or a breach, expect it to cover legal costs. Fewer expect it to cover regulatory fines (43%), government fines (41%) and remediation (41%). Covering loss of business and loss of IP (intellectual property) is even less likely, according to the report, at 25%.

When it comes to the validity of insurance cover, half of respondents cite that lack of compliance with necessary security criteria could invalidate their insurance, while 46% feel that not complying with business policies could be a problem and 43% point to the lack of an incident response plan.
 

Quick-fix rather than strategy

“Faced with risks every day, it’s easy for organisations to look for quick-fix solutions rather than focusing on building a solid security and risk management strategy,” explained Garry Sidaway, SVP Security Strategy & Alliances, NTT Com Security.

“Rather than relying solely on an insurance policy to cover losses, businesses need a different game plan. Buy insurance by all means but ensure that you can demonstrate that you have put controls in place to reduce your risks, and what these controls cover because this way you know what is being insured. Being able to demonstrate that these controls are being tested and monitored is essential. Insurers need to know what they are insuring and the controls put in place to protect assets – this is the only way they can agree on cover.”

The NTT report also reveals that only 52% of businesses have a full information security policy, while 49% have a disaster recovery plan in place.

Picture: Garry Sidaway, NTT Com Security – 'businesses need a different game plan'

Article written by Robin Snow | Published 06 May 2016

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