Businesses need to prepare for full costs of cyber attacks, says insurer

As cyber attacks hit firms

Businesses could face a much higher bill than they expect or are prepared for after falling victim to a cyber-attack, according to new research from Lloyd’s, the world’s specialist insurance market. 

As businesses increasingly become the target of sophisticated hacking attacks, Lloyd’s warns them that they need to properly prepare themselves or face a hefty bill, including ‘slow burn’ costs such as reputational damage, litigation and loss of competitive edge. 

The research identifies ransomware – such as the WannaCry worldwide ransomware attack last month – as a rapidly increasing threat, together with distributed denial-of-service attacks and CEO fraud.  The analysis also highlighted that financial services firms are the most targeted by organised cyber-crime, but that retail is also increasingly being targeted.

The findings were part of a new report released today by Lloyd’s in association with KPMG and legal firm DAC Beachcroft, which looks at the nature of the current cyber risk landscape as well as the top threats by industry sector.

Inga Beale, CEO of Lloyd’s, said: 

“The reputational fallout from a cyber breach is what kills modern businesses. And in a world where the threat from cyber-crime is when, not if, the idea of simply hoping it won’t happen to you, isn’t tenable. 

“To protect themselves businesses should spend time understanding what specific threats they may be exposed to and speak to experts who can help handle a breach, minimise reputational harm and arrange cyber insurance to ensure that the risks are adequately covered. By reacting swiftly to mitigate the impact of a cyber breach once it has occurred, companies will be able to minimise the immediate costs and their exposure to subsequent slow burn costs.”