The importance of cyber security and insurance for businesses

 

This year’s National Cyber Security Awareness Month (NCSAM) theme is a call to
“Do your part. #BeCyberSmart.” Just how important is cyber security and what can businesses do to protect themselves?

There was a time that a successful security breach “happened right under the noses” of business owners. To access a system, hackers quite literally had to be within the very walls of the building they were intending to extort from. In the 21st century, technology has evolved to include the Internet of Things, Smart Cities and the 4th Industrial Revolution and breaches need not even come from the same region, country or continent. With a press of a button, anyone with the know-how and means can communicate with any server, all while sitting across the globe.

Breaches today happen in their numbers, having considerably increased in recent years. A study by the University of Maryland, USA estimates that an attack today, occurs at least once every 39 seconds anywhere in the world.1

‘If you connect it, protect it.’

‘Disruption’ (of a good kind) is the ‘name of the game’ in today’s business development landscape. Innovative ideas and clever, convenient tools have given rise to many exciting business start-ups. Entry into the market as a result, is quicker, less cumbersome and costs significantly less. Consumers and business owners alike, favour disruption of this kind.

Unfortunately, it’s also an appealing playground for those with more deplorable intentions –malicious coding, digital viruses, hacking and other forms of cyber crime can easily be the downfall of businesses, great and small.

“It makes sense that if you as a business owner are going to use various structures and platforms to house your valuable information; know and understand them well enough that both the advantages and risks are clear to you at the outset,” says Lana Ross, Chief Operating Officer of Discovery Business Insurance.

“If not, you could inadvertently make your business more vulnerable to cyber attacks. Knowing what you’re up against at any given time can make a huge difference.”

“The effects of cyber crime are not just mildly inconvenient. It can severely damage your reputation and cost significant sums of money to repair – provided you can,” she adds further.

Cyber crime is mostly about making money by means of threat. Globally, around 71% of cyber crimes are motivated by financial gain. It’s been estimated that by 2022, the global cyber security market will be worth around $133.7 billion and $248.26 billion by 2023.2 And it’s also very concerning that South Africa is among the top 10 countries with the highest cyber exposure in the world.3

Information loss, reputational downfall, financial ruin and legal implications

A cyber attack can lead to system damage and to loss or theft of confidential and personal information stored on a computer system.

“Businesses usually have a number of computers they rely on for their daily operations. A Denial-of-Service (DoS) attack is an attack meant to shut down a machine or network, making it inaccessible to its intended users or computers. The attack is accomplished by flooding the target with traffic, or sending it information that triggers a crash.4 This will mean that the business cannot operate optimally until they can decontaminate the affected computers” says Ross.

“They could also lose essential data – including their clients’ data – which could expose their clients to illegal activities too. A cyber attack can also lead to loss of revenue and profits, which may even cause a business to fail.”

Then there’s the possibility of legal repercussions. “If a third party’s information is compromised during a cyber attack on your business, they may sue you. If a cyber attack results in client information being lost or compromised, the business could be in breach of the Protection of Personal Information Act (POPIA) which carries fines of up to R10 million. Alternatively, the business owners may face up to ten years’ imprisonment. All of this results in high legal defence costs.

If banking information is stolen, it could mean that a client may incur financial losses themselves. Your business may then be found liable to compensate the third party for any losses they incurred attributable to your business,” Ross adds.

What can businesses do today to protect themselves?

Making use of reputable protective software is a good place to start; keeping it up to date is just as important. A proactive approach far outweighs having to be reactive once an attack has taken place. Professionals and experts in this field have access to all the latest technology which can be implemented and maintained as a way to enable a business and keep cyber criminals at bay.

Today’s cyber criminals are having a field day with more than 50 billion devices connected to the internet worldwide5, and especially now during the COVID-19 crisis.

“Phishing, ransomware, cyber theft and fraud are all on the rise, so insurance providers should look at the problem holistically and tackle it proactively by building in remediation through IT security products, as well as cyber threat awareness mechanisms for their clients,” says Ross.

“It is important to us that our business insurance clients have comprehensive cyber insurance as well as access to technologies that help them adapt to new ways of working, especially now that working environments have changed. Dedicated IT support services are also important so as to help resolve IT issues quickly and avoid interruptions to their business.”

“We give our clients cyber protection against losses to their business and losses to third parties following an insured cyber event. We also give them cyber protection packages that allow for immediate remote IT assistance following a cyber event. To enable them to work from home, we give clients access to digital services such as email and virtual conferencing apps. Clients can get access to these digital services at no additional cost for the first 6 months. In addition, we give all our clients access to a dedicated IT support desk at no additional cost until 31 December 2020 to help them resolve IT issues quickly.”

“These services are supported by our cyber security partner, AVeS Cyber Security, who are recognized as one of the market leaders in providing cyber security services to the insurance industry for more than 22 years,” she adds.

“A more holistic approach allows businesses the opportunity to mobilise themselves much faster in this current digital landscape – both to prevent attacks, but also if it should unfortunately happen that a business becomes compromised. Holistic solutions are designed to protect clients and lower their risk exposure, no matter what kind of cyber crime they may be exposed to.”

Discovery Insure Ltd is a licensed non-life insurer and an authorised financial services provider. Registration number 2009/011882/06. Product rules, terms and conditions apply. Go to www.discovery.co.za for more details or call us on 011 529 6620.

About business insurance from Discovery

We understand that different businesses have different needs. That's why we give you comprehensive, yet flexible, insurance cover that is tailored to your business and considers the business risks you face in a modern, fast-paced world. You'll get business insurance that is driven by technology and built on a model that shares value for managing your business well. Through our partnership with Endeavor South Africa you'll have access to a diagnostic tool that will help you identify key areas of development so that you can grow your business. In addition, you will get access to service providers, at a preferential rate, who can help your business develop in the right direction. To find out more, speak to your broker or contact us and we will help you.

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