While the majority of global organisations say that it’s now ‘vital’ their operations are insured against information security breaches, less than half (41%) are fully covered for both security breaches and data loss, while just over a third have dedicated cyber security insurance presently in place.
These are the alarming results of the 2016 Risk:Value report produced by NTT Com Security. The detailed document examines business’ current attitudes towards both cyber security and risk.
Research conducted among 1,000 non-IT business decision-makers representing companies across the UK, the US, Germany, France, Sweden, Norway and Switzerland reveals that one-in-ten (12%) have no insurance cover at all for either eventuality. This is despite the fact that most business leaders admit there’s now an increased cyber threat. Indeed, the cost of an organisation recovering from an attack in the digital realm could now start from a baseline figure of around £1.2 million.
While cyber liability insurance has become increasingly popular and might include cover for data/privacy breaches, extortion liability and network security liability (‘The Cyber Risk’, Risk UK, April 2015, p5), only 35% of businesses see the need to take out a policy, although a further 43% are now in the process of organising one (or at the very least thinking about doing so).
Notably, wholesale organisations (43%) are most likely to take out dedicated cyber insurance, together with business/professional services operations (43%) and dedicated utilities sector businesses (39%).
Less than half (46%) of those respondents whose organisation has company insurance that covers data loss or a breach expect it to cover legal costs as well. Even fewer foresee such insurance covering regulatory fines (43%), Government fines (41%) and remediation (41%). Coverage for the loss of business and intellectual property is even less likely, according to the report, with expectations standing at just 25%.
When it comes to the validity of insurance cover, half of those respondents to the NTT Com Security survey cite that lack of compliance with necessary security criteria could invalidate their insurance, while 46% feel that not complying with business policies might be a problem. Some 43% of interviewees point towards the lack of an incident response plan.
Faced with risks every day, it would be easy for organisations to look towards ‘quick fix’ solutions, but they should instead focus on building a solid security and risk management strategy.
“Rather than relying solely on an insurance policy to cover losses, businesses need a different game plan,” asserted Garry Sidaway, senior vice-president for security strategy and alliances at NTT Com Security. “Buy insurance by all means, but ensure you can demonstrate that the business has put controls in place to reduce its risks, and also outline what these controls cover.”
Looking at the bigger picture, it’s fully apparent that security must be embedded within the culture of an organisation from top to bottom. As a discipline, security has to be actively championed by the CEO, designed and executed by the CISO and communicated effectively such that every employee assumes responsibility for ensuring good practices are rigidly followed.