Are You Protected Against Cyber Crime?

13/11/2015 Filed under Accounts, Finance, IT

Following our post in October on the recent experiences of cyber-crime activity, we have asked our insurance broking partner, AB Insurance, to give an insight into the issue from an insured perspective.

 

Cyber crime is costing the global economy nearly £300bn a year and shows no signs of reducing.  The recent spate of Cyber attacks, including Talk Talk and British Gas, only serve to highlight the current climate. You would be mistaken in thinking that this is an area of crime restricted to the large Companies and conglomerates.  It is a very real and increasing threat and is affecting greater numbers of SME’s, as criminals target what they perceive to be a more relaxed approach to IT security measures in smaller business concerns.

 

Cyber crime is wide-reaching and can affect the fraudulent taking of funds, as well as the misappropriation of both customer and staff data.  A growing reliance on business technology is enabling crime to be committed in increasingly subtle ways, which can go undetected for long periods of time.  Any crime, which is computer or information technology dependent, falls into the definition of Cyber crime and insurers are having to provide increasingly sophisticated cover to ensure businesses are protected.  This exposure has largely been ignored by most UK businesses until the last 6 months, despite it being something which, with good planning and appropriate IT security monitoring and controls in place, can be managed but is unlikely to ever be eliminated.  It is essential that businesses ensure that a ‘Crime Policy’ forms part of its’ risk management process in order to mitigate the impact of a cyber crime attack.

Cyber criminals often penetrate a company’s computer and email systems, and for a year or more watch and plan their attack. Then they strike.

 

Theft via on-line banking is on the rise and Crime insurers are having to deal with more and more claims.  A recent claim paid, involved two members of staff in a Company’s Finance Department who had password protected responsibility for the on-line electronic fund transfers from the company’s bank accounts. One morning, an attempt to make a payment to the company’s suppliers is greeted with an error message. The staff contact the bank’s technical support and are informed that the bank is unable to make payment, as the company accounts are showing almost zero balances. An urgent investigation was launched and it transpired that earlier that day an individual had hacked the on-line system and emptied the company accounts. The monies were transferred to off-shore bank accounts with the amounts being quickly removed and deposited elsewhere. The money was unrecoverable from the bank.

 

There are many more examples of this nature and as you may appreciate, it is a wide and complex area for insurers to tackle, let alone most businesses. However, the good news is that within the insurance industry, there is recognition that this area of risk protection has to be developed to deal with this emerging Crime exposure.  It is also imperative that businesses look seriously at Crime and Cyber cover, before it’s too late.

 

If you have any concerns or questions on how exposed your company may be then please contact Mark Rogers from A&B Insurance Brokers (Mark@ABInsurance.co.uk) for Cyber Crime advice.