Cyber Liability Insurance
Cyber liability insurance shields businesses from financial and reputational harm caused by cyber incidents like data breaches and ransomware attacks. It covers costs such as data recovery and legal fees, offering essential protection tailored to each business’s specific cyber risks.
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Cyber Liability Insurance for e-commerce and email
What is Cyber Liability Insurance?
Cyber Liability Insurance covers the risks associated with online business, internet use, network operations, and data assets. Businesses are increasingly recognising the substantial risks of liability and disruptions these activities can pose.
This type of insurance safeguards against issues arising from online activities, including breaches of privacy, violations of intellectual property rights, the spread of viruses, and other serious problems that can be transmitted from one party to another over the internet.
Who buys Cyber Liability?
Today, we all use the internet and electronic forms of communication in both our personal and professional lives. Indeed, it is difficult to
recall how we were ever able to manage without such technologies and the benefits they bring. However, our familiarity with such technologies can lead to a blase approach to the risks associated with their usage.
Anyone, but particularly firms using email, are exposed to risks. A firm with a web site now has the legal liabilities of a publisher. The Internet has spun a whole new ‘web’ of liability exposures. Cyber risks are faced not just by e-commerce companies and those doing transactions over the internet. Any organisation reliant on computer or telephone networks, digital information or the internet faces these exposures; this means just about every business in the world today.
In summary, you should seriously consider cyber liability insurance if you’re one of the following: engaged in e-commerce; reliant on computer connectivity for transactions or data exchange; stores information that can be accessed over the internet or intranet; are an online media company or publisher; you are heavily reliant on email usage.
E-Commerce Companies
These companies can be traditional companies, mail order companies or dotcoms, and tend to be within certain verticals where goods or services are most likely to be purchased online. Examples are…
- Music
- Books
- Toys, games and gadgets
- Gifts
- Clothing
- Wines and spirits
- Dating agencies
- Gambling/gaming services
- Garden centres
- Sports equipment
- Travel agents
- Vehicle sales
- Property sales
- Computers
- Home appliances
Other Transactional Websites
Other transactional websites include client interactive areas, supplier interactive areas, bulletin boards, discussion forums, downloadable files, email subscription services, sales support, etc. Examples are…
- Hotels
- Charities
- Cinemas
- Theatres
- Shows and Box Offices
- Trade Associations
- Logistics
- Travel Agents
Companies who store sensitive or critical data
Examples are…
- Lawyers
- Accountants
- Insurance Brokers
- Hotels
- Surveyors
- Architects
- Housing Associations
- Local Authorities
- Security/Alarm Companies
- Sporting Sectors
- Recruitment Consultants
Companies with a large amount of information on their websites
Examples are…
- Online Content Publishers
- Local Newspapers
- Content Aggregators
- Radio / TV
- Magazine internet ‘news’ site
When should I consider Cyber Insurance?
Creating a website is simple. The exposures that come with it are not. Privately owned companies that venture onto the web face liability exposures that are emerging, evolving, and complex.
Commercial companies that disseminate information to the public via web sites face the same legal exposures as publishers, yet most have little or no concept of their resulting legal responsibilities. Moreover, new legislation continues to create potential liabilities, particularly in the areas of user privacy and domain name infringement.
Why do I need Cyber Insurance Cover?
Traditional liability products do not address Internet exposures and the risks involved in Internet business have blossomed with the worldwide web itself. It is thought a third of UK businesses believe that their general insurance policies provide full cover for damage arising from security breaches or data loss, and another third admit that they do not know. Only one in six businesses correctly believes that there is no cover.
By disseminating information to the public via a website, commercial businesses now have some of the same exposures as publishers. These include conventional publishing exposures such as copyright infringement, defamation and invasion of privacy, as well as emerging exposures related to operating on the Web.
The universe of potential plaintiffs is staggering, given the number of people and organizations that are currently surfing the Net. A potential legal action from just one of them could be costly. In one case, a company improperly used a sports celebrity’s name and photograph on its web site, and the celebrity sued for the “fair market value” of his name, plus additional damages of $750,000. Clearly, the potential liability associated with web site content is already great, still growing, and rapidly evolving.
For a company operating in today’s high tech world, your computer network will more than likely provide internal and external email. You will probably have your own web site providing information about your company, its products and services with many companies now offering e-commerce facilities.
Information Security must be seen as a management and business challenge, not simply a technical issue to be handed over to the experts. To keep your business secure you must understand both the problems and solutions. Since Information Security relies as much on policies and a procedure as it does on IT defences it is clearly a top-level management issue. The Turnbull Report also imposes duties on public company directors to identify, manage and take an informed opinion on the transfer of these risks.
Coverage
Defence costs and legal liability due to:
- Defamation, breaches of privacy, breaches of intellectual property rights or the breach of any statutory duty as a result of any electronic communications.
- Third parties’ financial losses as a result of a hacking attack or virus that emanated from the insured’s computer systems or due to their inability to access the insured’s computer system.
- Damage to computer systems as a result of a virus or hack attack.
- Business Interruption (loss of revenue) as a result of a virus or hack attack.
- Ransom demands or threats to introduce a virus or hack into the insured’s computer systems.
- Legal expenses incurred in the enforcement of intellectual property rights on the internet.
- The costs of a public relations consultant to mitigate reputational damage as a result of any loss that is covered under the policy.
Do you require cover? What is the exposure?
Do you have a website?
- Breach of intellectual property rights
- Libel and slander
- Misleading advertising/pricing
Do you hold HR/payroll data on your network?
- Breach of employees’ privacy rights
Do you allow staff to use email and the internet?
- Libel and slander
- Damage to your systems due to a virus or hacking attack
- Damage to third parties’ systems by you forwarding a virus
- Employees creating or sending a virus to your business contacts
- Employees hacking activities
- Employee claims for an inappropriate workplace
- Breach of Data Protection Act
Do you allow suppliers to access your network?
- Damage to your computer systems due to a virus or hacking attack
- Consequential loss to your business due to downtime
Do you operate a bulletin board, blog, discussion forum or chat room?
- Libel and slander
- Breach of intellectual property rights or confidentiality
Do you have sensitive data accessible through your web server?
- Libel and slander
- Breach of intellectual property rights or confidentiality
- Breach of Data Protection Act
Do you transact business via your website or rely heavily on email?
- Damage to your systems due to a virus or hacking attack
- Your lost revenue due to a virus or hacking attack
- Breaches of statutory duties regarding the advertising or sale of goods or services by e-commerce.
Do you hold/obtain customers’ credit card details and personal details on your network?
- Breach of Data Protection Act
- Third parties’ financial loss due to dishonesty of your Employees
Claim Examples
| THIRD PARTY CLAIMS | |
| Claims made against you for internet or email libel | Norwich Union paid Western Provident £450,000 in order to settle an action that an email at Norwich Union incorrectly alleged that Western provident was about to be investigated by the DTI. |
| Claims made against you for breaches of intellectual property rights | Easy Group sought compensation from sixty separate companies who had the word “easy” in their registered internet domain name. In one specific case Easy Group took legal action against easypeople.co.uk and demanded that they pay the fee of £100,000 for its legal costs in pursuing the matter. |
| Claims made against you for breaches of confidentiality or rights of privacy (for example, a breach of the Data Protection Act) | A list of more than 1,800 web users and their personal details has been left at http://www.ukshops.co.uk/, an online shopping mall that directs buyers to well-known names such as Boots, Comet, Debenhams and Interflora. On display were users’ names, email addresses, postal addresses, gender and age group. Following the press’s investigation, the UK information Commissioner’s Office agreed to act on behalf of the thousands of consumers who had their details exposed. |
| Claims made against you for misleading pricing | Kodak mis-priced a top quality digital camera at £100 instead of £329. Not surprisingly they received over 10,000 orders in a very short space of time. Following press coverage and the threat of legal action, Kodak honoured the contracts which cost them over £2.3m. |
| Claims made against you for jurisdictional issues | Yahoo’s litigation with the French courts over the availability of Nazi memorabilia on Yahoo’s sites has lasted for over four years now. |
| Claims made against you for any errors or omissions in the provision of technology services to your clients (coverage only offered if applicable) | Client held software consultant accountable for failure of bespoke accounting system to work. Total loss exceeded £500,000. |
| Claims made by your employees for an inappropriate workplace (for example for sexual harassment) | Claims made by your employees for an inappropriate workplace (for example for sexual harassment) |
| Claims made by your employees for breaches of confidentiality due to you misusing their date. | British Gas was forced to pay over £200,000 to an ex-employee arising from the comments circulated via the internet that breached his privacy. |
| FIRST PARTY CLAIMS | |
| The costs incurred in repairing the damage caused to your computer systems and finding, replacing or restoring your computer records as a result of a hack attack or virus. | A computer engineer who had been employed to update the computer system of a sheet metal company was fired due to incompetence. When the company refused to pay the engineer, he hacked into its computer system and deleted their files. It cost the company over £70,000 to rectify the damage. |
| Reinstatement of your lost revenue due to your inability to conduct trade electronically as a result of a hack attack or virus. | In an October 2004 UK court judgement, it was deemed that there was no cover for Tektrol’s business interruption loss under their all risks policy, due to the ‘erasure of information on computer systems’ exclusion. Tektrol’s loss was due to the combination of a burglary and a virus. Uninsured losses do not tend to be reported, but the 2004 DTI Information Security Breaches Survey found that 1% of security breaches disrupted the company for more than a week and a further 1% for over a month. |
| Your losses as a result of third parties using your computer systems to steal your money. | Citibank lost £6.25m to a hacker using an old computer in an accountancy office in St Petersburg, USA. He was arrested in the UK and extradited to the US where he is now serving a prison sentence. The FBI has still not recovered £250,000 of the funds. |
| Ransom demands or threats to introduce a virus or hack into your computer systems, or to disseminate the data you hold on your computer systems. | A dismissed IT department employee encrypted the entire database of his previous company and then demanded £1m in ransom. The company were preparing to call his bluff, when it found out that not only had he actually succeeded, but that it would cost at least £5m in computer and employee time to undo the damage. |
| Your legal expenses incurred in the enforcement of your intellectual property rights on the internet. | Road Tech Computer Systems found that a competitor, Mandata, had been using Road Tech Computer System’s registered trademarks as metatags on their web site. By doing this, Mandata had ensured that internet traffic was diverted to them. Road tech Computer Systems sued Mandata successfully and received £80,000 in compensation. |
Quotations
Rowlands & Hames would be delighted to obtain a Cyber Liability quotation on your behalf. The information provided in this Technical Bulletin has been kindly provided by CFC Underwriting and we gratefully acknowledge their assistance in preparing this document.
CFC Underwriting and its award- winning Cyber Liability Policy is Rowlands & Hames’ preferred underwriter and policy wording. The detail of cover provided above is based upon this specific contract. Rowlands & Hames have access to other underwriters and policies should our preferred policy not be suitable.
Premiums start from as little as £250 plus insurance premium tax for simple email and internet insurance for a basic website.
Insurance policies tend to have certain subjectivities and exclusions. Our preferred policy relies on just two major subjectivities and exclusions relating to ‘back-up’ procedures and ‘obscenity controls’.
Policy limits and exclusions may apply, please see policy wording for full terms and conditions.
Contact the Team
Mike Watkinson Dip CII
- Business Development Director
- 01253 598973
- mike@rowlands-hames.co.uk
The Sectors
Testimonials
Many thanks to Rowlands & Hames, especially Gary Baxter who has helped and guided us through our insurances this last year, and problems [claims] when necessary. Your help and support are very much appreciated.
Further to all our communications and dealings over the last few months, we would like to thank you for your tenacity and achieving this result in respect to settling the above claim for £800.00. Please accept our thanks for keeping at the insurers and ensuring this favourable outcome.
I would have no hesitation in recommending Rowlands & Hames and Gary to individuals or corporate structures requiring insurance services. It is great peace of mind to know that a competent individual and broker is supporting both myself and my companies.
In response to the handling of a claim:
“Tony Swallow was excellent, a credit to Rowlands & Hames."
Further to all our communications and dealings over the last few months, we would like to thank you for your tenacity and achieving this result in respect to settling the above claim for £800.00. Please accept our thanks for keeping at the insurers and ensuring this favourable outcome.
Rowlands & Hames have always provided good advice, and have consistently ensured that my clients and I have appropriate and cost-effective insurance cover in place at all times, regardless of the complexities of the circumstances. Their claims-handling support is second to none in my experience.
Thank you so much for all of this and to Mike and Paul for making life so straightforward with renewal yet again. Our director has total confidence in the service you provide and is grateful for our longstanding partnership.
That’s great news Thanks for your persistence with this matter I am sure it made all the difference. It is nice to see someone go the extra mile for their customers even though it wasn’t really your problem. Once again thanks for the brilliant job and advice.
Regarding our latest newsletter: “What another classic example of Quality Customer Care – Sending out information like this is vital to ALL businesses and not just your Customers – so just to say you guys never cease to impress me.
The insurers were slow to make the payment once the claim settlement had been agreed. Our claims manager Colin chased this on our behalf. The service from Colin was wonderful, he communicated clearly and often and I really felt he was looking after our clam. Colin made the whole process quick and easy and took the stress out of it for us to thank you!
I would like to take this opportunity to commend one of your staff: Mike Watkinson.
This is customer service at its finest and Mike is surely a valuable and valued member of your staff.
Moving forward the team took the reigns in organizing the incident in a precise and methodical way. There were no delays, everyone was on site no later than Monday and everything generally ran smoothly throughout the refurbishment.
We received excellent service, speed and communication from Rowlands & Hames. The team that worked on my property were very knowledgeable, highly experienced, reliable and professional. They kept me up to speed as the job went a long. They were tidy and polite.
Paul has dealt with our business from day one and I have found him to be very knowledgeable and approachable.
We have been dealing with Trevor Taylor for many years and have always found him to be most helpful and professional in every way. His assistance in all aspects of out insurance has proved to be invaluable. I can recommend his service to anyone.
…service from Rowlands & Hames has been exceptional over the years.
I have to add that I have always been impressed by Tony’s help in the past for our commercial business insurance and I am equally so pleased in the way this insurance has been effected.
Just to let you know I have received payment from the insurance company.
May I take this opportunity to thank you and your colleagues for your help with this claim. You made it easier for me and kept me updated along the way.
Keep up the great work guys.
Great customer service from Gary Baxter and his team.
I have dealt with a number of other brokers in respect of our block policy prior to our agreement with R&H and am able to state confidently as the policyholder, I am more than satisfied and recommend without hesitation, the service given by your team being of an exceptionally high standard. Keep up the good work.
Thank you June – your response was very quick as usual, really good service
…the [travel] insurance has been fantastic and sorted everything out very promptly for him – his son is still out there with him and [the travel insurer] have covered all of that so thanks very much to them and you and Mike etc for all your help.
I would also like to inform you that I am leaving next Thursday. I would like to thank you for all your help and hard work that you have supported me with. Your service was incredible and I would recommend you with the highest regards to anyone. Thank you.
Thank you so much Colin to you and Tony for all your all efforts on our behalf. We cannot thank you enough.
I wanted to thank you very sincerely for obtaining the insurance claim monies for me. The system was very trouble free for me. It is a great help, and also gives me much confidence in case there are future problems. Meanwhile, very many thanks for your work regarding this issue.
I found the staff to be very efficient and professional and would recommend your company to anyone. Good job
Following a dispute with an insurer over temporary unoccupancy… “It’s today’s actions that will determine which and how companies come out of this. You have been brilliant and show the true value of having a broker. Catch up soon. Thanks
My associations with Rowlands & Hames goes back 20 years or so. I have always found them exemplary in any advice, claims etc. We recently had what we considered to be a potentially difficult public liability claim with a major client of ours but this was soon successfully concluded by John Isles and his very efficient team. I am extremely pleased with our involvement with this company.
I’ve always had great service from Rowlands Hames so would be happy to ask you for help with other insurances as they come up for renewal.
Many thanks for your assistance, you’ve been first class as always this is why we use professionals like yourselves.
great CSR to help us get our insurances ready for our first 6 employees starting next week
Many thanks to you for your support throughout the claim process. The true value of having a Broker is realised when a claim occurs.
I am grateful and very impressed with the care and understanding R&H’s claims team have shown throughout a stressful and difficult time for me. I got my Fiat Panda back today, all sparkly and repaired; without your excellent handling of my claim, the last few months would have been so much worse as I have recovered from my injury. I have been a customer of yours since Andrew Dalby days and your company has never let me down.
Thank you Paul and it is because of the relationship we have with you, the way you throw everything at getting us the best response from the insurers and the flexible support that you give us that enables us to get on with delivering our work and not being bogged down/ restricted as we have in the past with previous insurers/brokers so again, thank you!
Amazing, thank you so much for your speedy response Rachel, very much appreciated as always
Hi Mike,
My pleasure. Julie has spoken very highly of you too with your help on the management companies.
Thanks Colin. Great work as per usual by R&H. Much appreciated.
Hi Dan,
Firstly, thank you for putting in a late shift the other evening to get all our new insurance policy documents over. All received and I’ve reviewed them and can confirm that all the details are all correct and that all terms and conditions are understood and acceptable. Both - Thanks for all your work on our annual renewal. You make the whole process very straightforward!
Thanks for all of your support in this Mike, Everyone feels better knowing that R&H and yourself in particular are there – I certainly do.
Thank you very much for providing such a detailed review of my insurance options regarding my two BTL (Buy to Let) properties.
I contacted Rowlands & Hames recently regarding a complex business insurance policy. The guidance and advice from Gary was absolutely brilliant. I would not hesitate to recommend Gary and his team.
I am so grateful for Liz Kelly and her huge help in getting the insurance sorted for my property. I have been waiting for 6 months for the transfer of ownership from the land registry and am still waiting. As an executor of my father's will, it has been a long journey. In the last 3 years, I have lost my mother, father, and my partner all to cancer and dealt with probate 3 times now and property. For once, I have felt someone truly tried so hard to sort out the issues, and Liz, no fuss just wanted the right outcome for someone she doesn't even know not knowing as a person my history of loss. Liz, you are an angel. Thank you so much 💓. You deserve a huge Christmas bonus.
Wow what can I say other than yet again thank you to yourself and Colin for all of the hard work you have put into getting a result for us on this, we have gone backwards and forwards and not made it easy for you (certainly not on purpose!) this is an amazing result and we are incredibly surprised and happy! Thanks again both, you really do look after us and if there was an award for it you would win it!
I have had so many brokers emailing me over the last few weeks wishing to discuss how they can help us and I take great pleasure each time in mentioning the ongoing and great relationship we have with our brokers and that they cannot possibly compare – I am right every time!
Dear Paul
Whilst Janet has been your point of contact, and will remain so going forwards, I just wanted to say thank you for your diligence in this matter. We have been impressed by your feedback, and for my part I am relieved that our business interruption cover and documents cover Is now on a floating (non-location specific) basis. This has been a concern during our most recent renewals. We look forward to working with you going forwards, and hope to meet you in person soon.
