Source: eKapija | Wednesday, 28.10.2020.| 12:52
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WIENER STÄDTISCHE: It is important to get insurance from cyber risks

(Photo: Pixabay / madartzgraphics)
The Covid-19 pandemic, aside from the global impact which has created a “new reality” overnight, has directly influenced the organization of business in the conditions of limited physical contacts. Health recommendations with rigorous personal distance measures have forced companies worldwide to send their employees to work from home. Corporate systems which enable remote work have therefore become more vulnerable, because, due to the circumstances, business operations have partly moved from protected corporate networks.

This has opened a new venue for cyber crime. Sending suspicious emails offering medical drugs and products and other content designed to provoke one`s curiosity has become a way of baiting a large number of people who use their home internet network in everyday work. By opening infected links and attachments, they directly expose the company`s data to direct access, increasing the possibility of theft, misuse and data changing. With the expected increase in the demand for IT solutions for increasing online safety, the demand for insurance from such risk has started growing as well.

In Serbia, it is important to know that Wiener Städtische Osiguranje enables insurance from cyber risks.

– The opening of infected links or attachments enables access to company data, that is, theft, misuse or the changing of data. In all these cases, a cyber risk insurance policy provides coverage by compensating the costs of hiring IT experts. Those costs mostly pertain to determining the scope of the damage in the sense of the type and the number of lost data, its limiting and recovery of data, removing the malicious code or the virus and so on – explains Sanja Jovanovic, the director of Corporate Insurance Sector at Wiener Städtische Osiguranje.

In addition to the damage that a company can suffer due to a cyber attacks, it is much more dangerous if the personal data of third parties are compromised in any way. The cyber insurance policy plays a key role in providing the coverage of the costs of hiring legal advisors, advisors for crisis situations, for the costs of notifying the persons whose data have been compromised or are suspected of being exposed to risk, as well as other costs incurred in an attempt to preserve the company`s reputation.

When this happens, the most expensive damage is that done to the reputation of the company that has suffered a cyber attack. Clients can lose trust in the ability of the company to reliably keep the data they`ve entrusted it with: names, payment card numbers or something else. The question of the responsibility of the managers often arises in such cases – from the general manager to the IT experts that run companies. As Jovanovic explains, funds from the so-called financial lines of insurance are often activated mutually, and cyber insurance and manager liability insurance belong to those lines and there are numerous examples on them being conditioned on each other.

Wiener Städtische Osiguranje enables insurance from cyber risk
Wiener Städtische Osiguranje enables insurance from cyber risk (Photo: alexskopje/

– The cyber incident itself does not directly or automatically raise the question of the manager`s responsibility, but it can lead to a range of events that could. If there is a loss of the personal data of third persons and the consequent compromising of the company`s reputation, court procedures and finally, a loss of revenues due to reduced spending, it is very likely that the capital owners will turn to the management and look into their responsibility for all the activities, from the creation of software protection to their actions in the crisis situation – she explains.

The manager liability insurance policy is there to cover the costs of the management`s defense if the capital owner decided to file a lawsuit. It also covers the damage if it turns out that the management is responsible. Direct financial consequences of the cyber incident are also covered by the insurance.

And that`s not all...

The cyber insurance policy will also compensate for the potential financial penalties imposed by an authorized state organ, and in such circumstances there are often costs of crisis management and costs of notifying the users and providing them with support as well.

When a cyber attack occurs, companies which don`t handle large amounts of personal data of third parties fear the loss of operating income the most, due to a temporary inability to do business. The causes can be the spreading of a malicious code or a virus which causes damage or disables access to computer systems and data in an attempt to carry out an extortion to the end of enabling access. In both cases, the cyber insurance policy compensates for the lost income and for the extortion costs, if the hired IT experts determine that it is necessary and under the condition that all reasonable effort has been made to determine that the cyber extortion is not in itself an instance of fraud, or an attempt to avoid and reduce the losses.

How to get a cyber risk insurance policy?

The first step is for the company that wants to insure itself from cyber risk to fill out a form in which it provides basic information about its computer system, the implemented protection, the manner of transfer and storage of data, but also financial data, information about the impact on regular operations, the quantity and the nature of the personal data of third parties. The condition is to install antivirus software on each computer, which must be updated at least once a week, to copy the crucial data and store them in another safe location at the same update rate at least, to have control of the network traffic. Above all, it entails the existence of a clear company safety policy.
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