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Cyber Risk and your business

News Desk

Most businesses today are connected to the internet and on most networks, there are sensitive or personal data that is vulnerable to cybercrime.

“The ‘2018 Cost of a Data Breach Study’ sponsored by IBM Security and conducted by Ponemon Institute LLC, shows that the average global probability of a material breach in the next 24 months is 27.9 per cent, an increase over last year’s 27.7 per cent.  Of all the countries surveyed, South Africa has the highest probability of experiencing a data breach at 43 per cent,” according to Kerry Curtin, Manager: Financial Institutions & Professional Risks at Aon South Africa.

“The reality is that any entity that conducts any aspect of its business online and holds any sensitive data – employee or client records, banking and payment details of staff, customers or own, market strategies or financials, payroll information, medical or academic records or any other sensitive data – is a potential target. And organisations of all sizes – from small businesses to large multinationals are at risk.  The study further reveals that forty-eight per cent of all breaches in this year’s study were caused by malicious or criminal attacks by hackers and criminal insiders who are indiscriminate in who they choose as targets,” said Kerry.

A data breach is defined as an event in which an individual’s name and a medical record, financial record or debit card is potentially put at risk either in electronic or paper format. In the IBM Ponemon study, three main causes of a data breach are a malicious or criminal attack, system glitch, or human error. The costs of data breach vary according to the cause and the safeguards in place at the time of the data breach.  A compromised record is information that identifies the natural person (individual) whose information has been lost or stolen in a data breach.

While existing forms of insurance sometimes carry a level of coverage, they were not intended to cover the many risks associated with an increasingly digital world. Standard policies are inadequate to cover the likely costs of even a more standard security breach, let alone cyber-attack or ‘hacktivism’.  Only specialist cyber insurance policies provide extensive cover.

“As our digital connectivity continues to grow and more entities conduct aspects of their business online, the threats are likely to grow exponentially. Regardless of size or status, no business is safe from hackers, unless it includes security as its ultimate priority.  There is no one size fits all approach to cyber risk insurance.  It all depends on the size of the company, the nature of its business and its unique levels of exposure.  In this regard, consulting with a professional risk advisor is an invaluable exercise in assessing your exposures, developing a risk mitigation strategy and transferring that risk to an insurer in order to protect your reputation, data, clients and bottom line,” concludes Kerry.

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