Cyber Insurance For Contractors Protection Against A Growing Threat

If you own a contractors business it’s important to have contractors insurance in place. Contractors insurance from a specialist broker such as Darwin Clayton, can cover traditional risks such as public liability, business interruption, and damage to your property, along with essential cyber insurance.

Cyber attacks on small and medium-sized enterprises (SMEs) are on the rise in the UK.  Research from Hiscox has revealed that 53% of businesses suffered a cyber attack in 2023, up from 38% in 2022. With the government putting the average cost of a successful cyber attack at £15,300, this is a potentially costly as well as growing problem. While insurance cannot prevent cyber-attacks, cyber insurance for contractors through Darwin Clayton can offer you financial support should your business fall victim to an attack.

What is cyber insurance?

Cyber insurance protects businesses financially should they be targeted by hackers or malicious software and suffer damage or data loss from their IT systems and networks.  A typical policy covers incidents such as having system access held for ransom, its system infected with malware, or losing money in a phishing scam.

What can cyber insurance cover?

Cyber insurance can offer organisations a wide range of financial protections, including:

• Data recovery – specialist IT services can get some or all of your data back. Cyber insurance can cover the cost of their fees.
• Customer notifications – businesses are usually required to notify their customers of a data breach, especially if it involves the loss or theft of personally identifiable information (PII). Cyber insurance can help cover the cost of this process.
• System restoration – cyber insurance can cover the cost of restoring and securing your systems after a breach.
• Paying ransomware demands – cyber criminals often ransom a business’s systems and data, refusing to allow them access until the ransom is paid. Should this happen, your cyber insurance policy will cover the costs of these demands.
• Legal expenses – if an attack leads to a loss of data or if it infects another organisation’s systems, you can be left open to legal action and compensation claims. Cyber insurance can cover the cost of defending the case and any compensation awards that may follow.
• Forensic investigations – these aim to reveal how the attackers got in and what needs to be done to prevent the problem from occurring again.
• Business interruption – should the attack mean you are unable to trade – if, for example, you are locked out of your system – then business interruption insurance will provide you with an income until you can get back to normal. While a typical policy will give you 12 months of cover, many insurance experts now believe that 24 months is a more appropriate period.
• Reputation management – cyber attacks can have wide repercussions and affect customers and suppliers. Effective reputation management can help keep third parties informed and protect important business relationships.
• Cyber attack prevention – as the threat has grown and the costs of claims have escalated, so some insurers now offer policyholders access to cyber security experts when they take a policy out. These specialists can undertake system vulnerability assessments and staff training to help prevent a successful attack.

Which contractor businesses need cyber insurance?

In a word, all.  With contrators’ systems being accessed by more and more devices and with cybercriminals getting ever more sophisticated, it’s a threat all businesses need to take seriously. Some industries are more vulnerable than others, though.  Owing to their complexity, size, interconnectedness, and the size of the potential prize, IBM has identified the following sectors – ones that contractors often work in, as particular targets:

• Construction
• Professional services companies
• Manufacturing
• Healthcare
• Government agencies
• Financial services companies
• Informtion technology (IT)

What are the most common types of cyber crimes?

While there are a variety of ways that cybercriminals and scammers try and gain access to systems, the most prevalent cyber crimes are:

1. Phishing – one of the most common forms of social engineering scams, these use supposedly trusted sources to trick people into passing over information. Once upon a time, these attacks were largely confined to emails, but fake social media presences and cloned websites are increasingly being used, too.
2. Malware – malware is a form of malicious software that either seeks to damage an IT system or open the door to another form of damagaing software, such as ransomware, access.
3. Denial of service (DOS) attacks – these flood systems with bogus requests in order to overwhelm them and prevent legitimate users from accessing emails or performing routine tasks. These are time-consuming and can cause significant business interruption.
4. Compromised identity attacks – these arise from hackers gaining legitimate users’ details and can be extremely hard to detect. These attacks can be performed in several ways, including credential stuffing.  Credential stuffing works on the basis of people using the same credentials – email and password – for multiple applications.  This is another reason why using the same username and password for multiple log-ins is such a security risk.
5. Code injection attacks – these involve a hacker injecting malicious code into a vulnerable computer or network to change its course of action. This is just the sort of vulnerability that the preventative action element of a cyber insurance policy can help identify and prevent.

Like some cyber insurance help?

While cyber-attacks are a significant and growing problem for UK contracting businesses, cyber insurance can provide them with the financial protection they need.  If you’d like to know more about cyber insurance through Darwin Clayton, then please call our specialist team on 01892 511 144 or contact us today.