Service interruptions caused by cyber breaches can be costly as it’s not just data at risk in these events.
In the last week, there have been two significant cyberattacks reaching news headlines: one in Las Vegas where two of the largest casino companies got hacked resulting in one paying a multi-million-dollar ransom to its hackers (Anthony 2023), and one right here on our home turf resulting in service disruption in all departments of Government services (Bell and McWhirter 2023). Investigations are still ongoing in the latter event, but if there’s one thing these two events can show us it’s that, big or small, cyberattacks can happen to us all.
While ongoing steps to restore service were taking place following the attack, the Bermuda Government advised that “Work to facilitate payroll and vendor payments has commenced, but payment delays are expected. Cashiers are accepting cash and cheques only at this time.” Further challenges were identified, forcing staff to revert to manual and other less efficient methods while the Government worked to “identify which systems are affected, which ones are not, so that we can return to servicing persons, so people…can get the Government services which they rely on,” (Bell and McWhirter 2023).
Service interruptions caused by cyber breaches can be costly as it’s not just data at risk in these events. Financial losses and reputational damage are also highly likely following a cyber intrusion. By being very open about the loss, the Bermuda Government has managed this week’s cyber situation well, but for smaller companies in Bermuda that are not as engaged with the public, a cyber event can be a cause for concern if they do not have the resources to establish a message or know what that message should be.
On an island like Bermuda where a company’s reputation is paramount, a cyber breach can become a PR nightmare. At Freisenbruch we understand the importance of reputation and the coverage requirements for our Clients. The policies that we have access to include cover for Public Relations Costs, which means that reasonable fees, costs, and expenses for obtaining advice and support to protect, or mitigate any damage to your reputation. Including but not limited to countering adverse publicity generated by social media would be covered.
In addition, our policies would also extend to Data Restoration Costs; covering reasonable fees, costs, and expenses for the restoration or replacement of data or programs that have been lost or damaged. Costs to prevent, minimize, or mitigate any further damage and preserve critical evidence of criminal or malicious wrongdoings would also be covered – including the cost of purchasing replacement licenses for programs, where necessary.
In today’s environment where we rely so heavily on digital information, having cover available for these costs – and having the correct resources to obtain them – can get a company back up and running in a reduced time period, lessening the impact on customers. We ensure our placements for cyber are also able to respond to a Business Interruption Loss including loss of net income (i.e., net profit or loss before income taxes), plus the expenses necessary to maintain the operation (e.g., payroll, functionality, or service of its business).
In addition, the ideal policy would also respond to include costs to avoid or mitigate the effects of a system outage or network interruption, discover and minimize such interruption or degradation of the network, and preserve evidence and substantiate the loss. In light of the confusion that can be caused following a cyber event, these services can prove invaluable to reassuring clients, protecting income, and to rebuilding systems.
At the end of the day, the potential losses – data, financial, reputational – from a cyber event could be devastating to any business. Only time will tell what the implications of the recent attack on Bermuda’s Government systems will be for Bermuda, but the best thing that Bermudian companies can do for their clients is to ensure their own systems are up-to-date and secure and have a broad cyber insurance policy in place to mitigate their exposure, should the worst occur.
Contact us today to discuss your cyber insurance needs so we can work together to protect your business against financial loss and reputational damage.
Marie Voysey-Moss
Vice President of Freisenbruch Broking Services
Direct #: (441) 294-4617 Email: mvoysey@fmgroup.bm
References:
Anthony, Abigail. 2023. “Caesars Entertainment Pays $15 Million Ransom to Cyber-Hackers After Breach.” National Review, September 19, 2023 https://www.nationalreview.com/news/casino-giant-caesars-pays-15-million-ransom-to-cyber-hackers-after-breach/
Bell, Jonathan and McWhirter, Fiona. 2023. “Russia Linked to Cyberattack on Government Services.” The Royal Gazette, September 22, 2023. https://www.royalgazette.com/general/news/article/20230921/government-communications-down/