Andrew Adam: Are you covered if hackers nick your data?

It’s estimated that one in seven UK-based SMEs will face some form of cyber attack or data breach in 2017 and that cyber-crime costs the UK economy £3.4 billion annually. This is a conservative estimate – most businesses who suffer an attack do not disclose the full extent of their loss, fearing the reputational damage it will cause.

A recent government report also showed that 87 per cent of small businesses surveyed had experienced security breaches such as data corruption, fraud and hacking in the previous twelve months. A recent report by anti-virus and IT security firm Symantec confirmed that the UK has the world’s highest rate of malicious email traffic. In its 2015 Internet Security Threat Report, Symantec showed that in 2014, one email in every 79 sent to UK businesses was designed to maliciously hack their IT systems. This represented a 61 per cent increase from 2013.

Fighting cyber-crime is rapidly becoming a key issue for police. On Monday, Police Scotland unveiled its Policing 2026 strategy, which included fresh focus on tackling cyber-crime, with civilian experts being brought into the force and additional training for officers.

All industry sectors are becoming increasingly reliant on technology and hold an increasing amount of data on customers, prospective clients, suppliers and competitors. Any loss of data that contains client details, any virus threat or cyber attack such as ransomware or phishing, could have a huge impact on your business. Malicious emails contain malware or codes embedded in the message to transfer viruses or dupe recipients into handing over personal or sensitive client information.

Despite these alarming statistics, many business owners still believe that their IT security is sufficient, that only large multinational organisations are targeted, or that the risks are minimal. The reality is that the threat is increasing as cyber criminals become more inventive and targeted with their attacks.

Financial losses associated with cyber-crime are significant for all and it’s important that more is done to protect individuals as well as businesses and their customers online. It’s vital that businesses ensure they have adequate protection and insurance measures in place to avoid a cyber threat. It is important to understand the risks you face as an individual and SME and mitigate them with a specialist Cyber Insurance policy.

Any commercial organisation will be aware of its legal obligation to have Employers’ Liability insurance in place and any prudent business owner will have insurance to cover their assets and revenue, but how many businesses have insurance cover to protect one of their most important assets – their data?

Andrew Adam is commercial director of Bruce Stevenson Insurance Brokers