Cyber breaches put businesses at risk for major losses

Lana Ross, Chief Operating Officer of Discovery Business Insurance

Cyber breaches put businesses at risk of major financial losses, reputational damage and legal difficulties, to name just some of the potential issues businesses could face, resulting in forward-thinking business insurance providers incorporating cyber security into their offerings to lower clients’ risk exposure and prevent claims. Some of the biggest challenges involve human error breaches, phishing and social engineering manipulation tactics, and ransomware. All of these can result in significant damage to businesses, as well as their customers. 

A cyber attack can lead to system damage and to loss or theft of confidential and personal information stored on a computer system. Businesses usually have a number of devices that are relied on for daily business operations. A Denial-of-Service (DoS) attack is an attack meant to shut down a machine or network, making it inaccessible to its intended users or computers. 

The attack is accomplished by flooding the target with traffic or sending it information that triggers a crash. This will mean that the business cannot operate optimally until it can decontaminate the affected computers or devices. Essential data – including their clients’ data – could also be lost, which could expose their clients to illegal activities too. A cyber attack can also lead to loss of revenue and profits, which may even cause a business to fail. Then there’s the possibility of legal repercussions. 

If a third party’s information is compromised during a cyber attack on your business, they may sue you. If a cyber attack results in client information being lost or compromised, the business could be in breach of the Protection of Personal Information Act (POPIA) which carries fines of up to R10 million. Alternatively, the business owners may face up to ten years imprisonment. All of this results in high legal defense costs. It is important to us that our business insurance clients have comprehensive cyber insurance as well as access to technologies that help them adapt to new ways of working, especially now that working environments have changed.

Dedicated IT support services are also important so as to help resolve IT issues quickly and avoid interruptions to their business, which are features which we have made available to our business insurance clients. Our cyber security partner, AVeS Cyber Security, is recognised as one of the market leaders in providing cyber security services to the insurance industry for over 20 years.

This holistic and proactive approach allows our clients to mobilise a response to a cyber attack quickly.