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Important not to ignore threat

THE 2015 Information Security Breaches Survey by PWC shows that small companies are more at risk of Cyber attack. The number of respondents to the survey who experienced a breach of security increased from 60% to 74% year on year. Many businesses may have been attacked already, without realising it. Business managers in smaller enterprises may not understand or, worse still, may be ignoring the threats. Directors and those responsible for IT securities, who fail to secure IT equipment against data theft or other computer misuse, could face costly civil actions or criminal investigation and prosecution.

Action by company executives should focus on data loss, as well as theft of money. Business managers should prepare for the new General Data Protection Regulations. They should also be aware of the potential for offences under the Computer Misuse Act 1990. As well as employee misuse of company IT, criminals can hack into computers and use them for illicit and unlawful purposes.

The good news is that most computer misuse can be avoided. Action including anti-virus software, systems fire wall protection, secure passwords for WiFi and logins, and other security procedures, will remove some risks of attack. Cyber Essentials is a government-backed, industry supported scheme to help organisations protect themselves against common cyber attacks and is a good starting point. Other useful sources of information were included in my July article, and I would be happy to share other information with business managers.

However, whatever action is taken, there will always be a risk of loss and need for insurance. In my last article I mentioned Cyber, Crime and Data Loss insurance policies. They offer protection against many Cyber related losses, including business interruption costs and liability to others. Individual directors and managers should also have Management Liability insurance. This type of insurance has been around for a long time and, as with Cyber insurance, should be a standard addition to a business insurance portfolio.

Although claims against individual directors and officers are rare, when they do happen they can be difficult to defend and extremely costly. The cost of defence is often more than any resulting awards for damages. There is also the hidden cost of diversion of management time away from core business priorities, and reputational harm. Modern Management Liability policies include protection against a range of insurable risks, including Directors & Officers’ Liability. Some will include Cyber relevant extensions to cover, as well as access to specialist lawyers and other advisers. As company executives face unlimited liability following breach of duty, this should be a “must buy’ for the peace of mind of all directors and business managers.

Towergate is a leading adviser on commercial insurance. For more information on Cyber, Crime, Data Loss and Management Liability insurance options, or a free review of how well your current insurance policies protect you already, please contact Simon Mitchell, Corporate Account Director at Towergate Insurance Northampton on 01604 887325.

Towergate Insurance is a trading name of Towergate Underwriting Group Limited. Registered in England Company No. 04043759, registered address Towergate House, Eclipse Park, Sittingbourne Road, Maidstone, Kent, ME14 3EN. Authorised and Regulated by the Financial Conduct Authority.

Companies mentioned in this article

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