Walking into your company one morning only to find all the computers have been removed by an unknown assailant could be one of the most disruptive business experiences you can have. No work is likely to get done that day, and it will probably take a little while to get back to full productivity again. However, the physical loss of your computing equipment is not the only kind of crime that could have a significantly detrimental effect on your work output.
A key element here is having the right insurance to help mitigate these risks. A business buildings and contents policy might pay for lost equipment, but it probably won't cover the loss of earnings caused by not having your IT provisions available, and it won't cover the effects of viruses, hackers, accidental infringement of intellectual property, online identity fraud, and data theft, amongst other potential threats. These costs could be substantial, and could potentially lead to insolvency for your company.
According to research from PricewaterhouseCoopers, a targeted virus attack could cost a large company up to £600,000, and a small-to-medium enterprise (SME) up to £50,000, (with the lion's share in both cases from the incident itself), and the remainder towards preventing it from happening again. In a survey of US businesses by B2B International and Kaspersky Lab, a direct hacker attack was reported as costing up to $1.67m (£1m) for a large company, and up to $72,000 (£45,000) for an SME. However, companies are nearly three times more likely to be affected by this sort of attack.
The danger from identity theft can also be high. In 2012, a survey by the National Fraud Authority estimated that identity theft had cost UK individuals £1.2bn that year. But it can affect companies as easily as it can consumers. Some information can be obtained by hacking corporate systems, via theft of mobile devices outside the office, from collections of paper documents that haven't been shredded, or even just through the use of information that is, by its nature, publicly available on the Internet. An increasing risk comes from fraudsters piecing details together from snippets found on social networking sites.
Either way, the results could cost dearly, both in terms of the direct bills these fraudulent identities incur, as well as indirectly, for example by going through the legal process to prove that a fake company set up via identity theft is not really connected to yours. A stolen identity could be used to change your company's registered address, the company secretary or director information, or even to appoint new directors. It could also be used to enter your company into an illegitimate contract.
The process of recovery from hacking has costs attached, even after the initial threat has been dealt with. After an attack, the police may take your computer equipment away for forensic investigation, which might mean you are without it for an extended period.
Protecting against all of these kinds of threats requires a special type of insurance that is specifically tailored through an understanding of the issues, and their likely effect on your business. Hiscox's E-risks insurance, for example, is specially designed to protect against threats to your business from the Internet. The policy will provide you with assistance in rectifying your computer systems or websites that have been affected by a virus. It will also pay for any compensation that you have to provide if the virus has been transferred to others you do business with via your systems.
These Internet-specific safeguards sit alongside Hiscox's more general IT-related insurance, aimed at technology workers all the way from large companies down to individual self-employed workers and consultants. This includes professional liability insurance, to protect you from those times where what you expected to deliver is not what the client expected.
Public liability covers you against all manner of damage to someone else's property that might occur due to your company's services. This can be combined into a single business owner policy, which also includes traditional protection for all your business equipment, from computers and printers to the furniture you use to work with them.
The information technology revolution has brought huge efficiency to business activities, but it can also lead to major breaks in workflow when your IT infrastructure malfunctions or becomes subject to attack. With appropriate precautions, you can minimise this risk.