Cyber and Privacy Insurance

In today's rapidly evolving digital landscape, the array of cyber threats and data breaches has reached unprecedented levels. According to Cybersecurity Ventures, global cybercrime costs are projected to reach $10.5 trillion annually by 2025.

As the frequency and complexity of these attacks continue to escalate, mere awareness of prevention strategies is no longer sufficient. Proactive measures have become imperative to ensure the safety of both individuals and businesses. Even with disciplined preparation and constant vigilance, the unpredictable nature of cyber threats can lead to substantial losses that impact us all. The constantly increasing presence of cyber and privacy risks has given rise to an essential solution that augments and supports the business's efforts to recover in the event of a cyber-attack: cyber and privacy insurance.

“Colonnade offers a forward-looking insurance solution meticulously tailored to address the unforeseen consequences of data leaks and breaches. Our innovative packages provide not only insurance protection but also a comprehensive suite of specialized services. These resources are accessible precisely when crises strike unexpectedly, offering a lifeline to navigate the complexities of cyber challenges. Our clients benefit from the expertise of seasoned data security professionals, IT security specialists, and legal experts specializing in the intricacies of data protection", Juliusz Malyszko Cyber Practice Leader outlined.

Understanding the landscape of cyber and privacy risks for businesses

In an era where information has become the lifeblood of organizations, privacy risks have woven themselves into the fabric of daily operations. Every business, irrespective of its size, confronts the ever-present challenge of engaging with electronic data stored on computers, servers, or within the expansive realms of the Internet. Data, both confidential and personal, traverses virtual channels, while the digitization and archiving of physical documents demand heightened vigilance.

The act of data management, whether traditional paper-based systems or modern cloud-based paradigms, inherently carries data protection risks. Companies find themselves vulnerable to disruptive attacks such as denial of service (DoS, DDoS) or web-based intrusions that threaten the very core of operational integrity. In the expanding digital landscape, risks associated with mobile devices, IT systems, and virtual spaces have grown increasingly complex. Contemporary businesses now prioritize the safeguarding of computer systems, networks, and the invaluable data they house, reflecting a pivotal shift from protecting tangible assets to securing digital frontiers.

Identifying potential triggers:

• Human factors: errors and omissions stemming from human actions
• Organizational weaknesses: process inadequacies and structural vulnerabilities
• Information security risks: challenges inherent in managing sensitive information
• Deliberate threats: intentional acts of hackers that introduce significant risks
• Outsourcing vulnerabilities: entrusting data management to external entities amplifies sensibility

As described by our examples, it is easy to make a mistake:

Example 1:

Insured company size: small

Insured business activity: producing wallets

Attack type: employee mistake

Description: An inadvertent employee error led to a serious data breach for the insured. In a regrettable error, an employee mistakenly sent an email to an unintended third-party recipient, attaching a database containing sensitive customer data. Although the recipient promptly deleted the email, the insured was compelled to inform their customers about the incident as a precautionary measure.

The financial impact ranged between 2 600 and 13 000 Euro. Fortunately, the cyber insurance coverage absorbed the costs of customer notifications, with the deductible acting as the sole financial commitment on the part of the insured.

Example 2:

Insured company size: large

Insured business activity: manufacturing computing devices

Attack type: latest anti-virus system was defeated by IT virus

Description: A new cyber threat disrupted operations for a prominent computing device manufacturer. Hackers managed to breach the insured's state-of-the-art IT system with a virulent malware, compelling a complete shutdown of all production activities for an extensive two-week period. For two weeks the process unfolded, involving the examination and clearance of servers, software, and computers by experts. To address the extensive damage, the insured's claim was severed into two categories: firstly, the substantial costs incurred for the specialized investigation and secure data transfer to new hardware; secondly, the considerable business interruption that persisted for over 14 days, until the full restoration of the IT infrastructure.

The financial impact of this incident ranged between 130 000 and 260 000 Euro. Notably, the comprehensive cyber insurance coverage covered all expenses related to expert services and mitigated net sales losses, with the deductible constituting the only financial outlay borne by the insured.

Example 3:

Insured company size: small

Insured business activity: accounting services

Attack type: ransomware using zero-day exploit

Description: Despite a very high level of IT security the accounting service’s servers were encrypted and the client has reached out to our incident response partner via hotline. Our partner could send an expert to the company on the day of the arrack and mitigate the losses to minimum. At the same time the expert confirmed that even though the company was highly prepared for potential threats, they couldn’t defend themselves in any way as the exploit was a zero-day (the producer of the software had no knowledge of the exploit before it was used by criminals).

Due to fast reaction of both our client and our claims department the loss was minimized to less than 10 000 Euro.

Addressing cyber and privacy risks

Modern-day threats to IT systems mirror the perils posed to tangible assets. The consequences of a cyber incident can be very severe. Colonnade's cyber insurance is skilfully engineered to navigate the complicated chain reactions of such crises, mitigating their extensive consequences. Consider a scenario that underscores the multi-faceted nature of these challenges within the framework of a company:

• Data leakage: confidential business or personal data is illicitly exposed, eroding trust and ruining reputation
• IT crisis management: swift action from the IT division is imperative to restore normal operation while sustaining business operations
• PR crisis mitigation: timely response to news of a data breach mitigates reputational damage exacerbated by the amplifying reach of social media
• Financial fallout: the financial implications of an incident disrupt regular business operations
• Management turmoil: unforeseen incidents triggers challenges at the management level

Strength and advantages of cyber privacy insurance

Cyber privacy insurance extends beyond conventional paradigms of coverage, encapsulating the manifold dimensions of data breaches, leaks, and their consequential aftershocks. The scope of this offering encompasses financial protection, preservation of corporate reputation, mitigation of IT system impacts, and a synergy of insurance coverage with expert guidance. This insurance spans the recovery of lost electronic data, encompassing expert investigations, re-collection, replication, and recovery costs.

Cyber and privacy insurance offers a universal remedy accessible to enterprises of all scales and industries. Irrespective of size or nature, entities susceptible to the triggers explained – be it data breaches, network disturbances, or beyond – can proactively harness the protective embrace of this insurance. In a world marked by uncertainty, one truth remains resolute: the capacity for cyber resilience stands as the bedrock upon which a robust enterprise is fortified. With Colonnade by your side, venture into the digital frontier with confidence, knowing that comprehensive protection is your steadfast companion.