quote
menu

The TalkTalk case and cyber liability: why your SME is at risk


The recent cyberattack on telecommunications giant TalkTalk highlights the vulnerability of large companies to digital crime. With such a well-resourced company allegedly falling victim to a 16-year-old boy, how can your company find protection?

Cybercrime on the rise

Cybercrime is a growing concern in the UK – so much so that the Office of National Statistics (ONS) recently commissioned a large-scale survey to investigate the figures for fraud and crime falling under the Computer Misuse Act.

The results were eye-opening. The ONS’s field trial showed that the past 12 months saw up to 5.1m incidents of online fraud, involving 3.8 million victims, and that over half of these involved some initial financial loss.

The survey looked at different types of digital crime, including:

  • fraud
  • the hacking of email accounts and social networks
  • the infection of a victim’s computer or other internet enabled device by a virus

 

An immense amount of personal – and corporate – information is under threat. Is your business protected?

Cyber crime and SMBs

Many SMEs overlook the issue of cyber crime, assuming the targets to be large corporations, or at least those who who operate in the IT or telecoms sectors.

In fact, SMEs are usually more at risk than larger firms. Why? SMEs often hold valuable data, such as financial information and client records, but generally don’t have the resources to protect it.

If a telecommunications giant like Talk Talk, with dedicated IT teams and sophisticated encryption software, can be a victim of a serious cyber attack, imagine how vulnerable smaller companies are.

Yet a startling number of SMEs do little or nothing to protect themselves against cyber crime.

What can SMEs do to protect their cyber assets?

Other than preventative IT measures, one simple way for companies to mitigate against damage is by investing in cyber liability cover.

At the moment, cyber liability is the most under-purchased of all important insurance covers. However, this might be set to change if a new law governing data breaches comes into force in Britain.

Cyber breaches and the law

In the US, most states already have mandatory requirements for data breach notification – meaning that if a company sustains a cyber attack, it must notify its clients. Such a law doesn’t yet exist in the UK but a recent Computer Weekly article highlighted an impending draft of EU Data Protection Regulation, which includes mandatory notification of cyber breaches.

Whether the law goes ahead or not, companies that are directly or indirectly responsible for the loss of client information may be liable to pay heavy compensation costs.

Imagine an import-export business unintentionally leaked sensitive information about its suppliers, leading to fraudulent attacks. The supplier could hold the import-export business responsible and sue for huge damages.

Or imagine a garage that had its client data stolen, leading to customers’ bank accounts being hacked. A single, relatively small incident could put the garage out of business.

Cyber liability cover: peace of mind

In both the examples above, cyber liability cover would go a long way to protecting the companies, compensating them for damages and legal fees.

While insurance brokers have been offering cyber liability cover for years, businesses of all sizes have been slow to take advantage of it – and many have suffered significant financial loss as a result.

The attack on TalkTalk shows that it’s time for SMEs to sit up and take notice of a very real menace. But rushing to buy an off-the-shelf product could be a false economy. The rapid evolution of cyber threats, combined with the unique exposures of SMEs offering different products and services, makes getting advice a good idea.

 

Related Articles

Scottish Power logo

Total Gas & Power

Total Gas & Power is a business energy supplier, wholly owned by Total SA. It has been a leading business ...

Read More
SSE logo

SSE

SSE is one of the UK’s leading business energy suppliers, catering for around 500,000 business with electric...

Read More
Scottish Power Logo

Scottish Power

Scottish Power has been operating since 1901 and is now owned by Iberdola, a Spanish energy firm that is one o...

Read More
Excellent, 9.7 / 10

thank you nicole for your kind help to…

"thank you nicole for your kind help to set up my business electric account fantastic service and your personal touch thank you"

This review was posted by Sam Raju on the 19th of February 2018

Aaron Gallagher recently helped me…

"Aaron Gallagher recently helped me switch the gas and electricity supply for our business. He was extremely helpful and well informed which was great for me as I know nothing in this area! He saved us a small fortune and dealt with all of the switch for us which again was extremely helpful as it wasn't completely straightforward. Thanks again for you help Aaron, it was so appreciated."

This review was posted by Rachel on the 17th of February 2018

A better deal for our Village Hall

"I recently used this company to get a better energy deal for our local village hall. Other companies were quite pushy but Lorraine and Bhavni from SwitchMyBusiness were much more professional. They sent me useful information by email enabling me and the village hall committee to make a decision about which supplier to use. The switch was done by phone and when the energy provider sent the paper work to the wrong address Bhavni sorted it out straight away. I saved over £1000 for the charity."

This review was posted by Irene Winter on the 16th of February 2018

Good Service

"Lorraine was great and very helpful. We negotiated and received a good deal on our supply."

This review was posted by Edwina Nash on the 16th of February 2018

The SME Personal Switcher

"The SME Personal Switcher, Lorraine Carey was really helpful."

This review was posted by Cross Fabrications on the 16th of February 2018