Cyber attacks

There are very few involved in the building industry who would risk operating without adequate insurance to protect against fire or flooding. Yet many in the industry are leaving themselves exposed by the growing threat of cyber crime, which can have a damaging affect on profitability and corporate reputation.

Research by the Department for Business Innovation and Skills estimated that 81% of large UK firms and 60% of small businesses were victims of cyber security breaches last year. Worryingly only 10% of companies have cover to protect against this growing threat.

This latest research follows numerous surveys and reports by leading trade bodies that reveals cyber crime as a real and growing problem for all businesses. Despite the obvious threat to their livelihoods and reputations, many UK businesses are unprepared and ill equipped to deal with cyber risk.

Sadly, companies involved in the building sector are not immune from the threat. As the sophistication and highly developed cyber techniques are becoming more commonplace, companies of all types have become a potential victim. This means any businesses involved in the supply chain, from developers to subcontractors, need to address this real and present danger.

Clearly there is a need to provide more help and a greater understanding of how online security and fraud issues can have an effect on those involved in the building industry. In this uncertain environment all firms across the building supply chain need support to make sure that they are engaged in implementing appropriate prevention measures in their business.

Cyber crime will continue to pose a major threat to any firm for the foreseeable future. Increasingly, many attacks take place because most businesses are now using the latest technologies, such as mobile devices, tablets and laptops. Such attacks can be from criminal gangs, rogue foreign states, disgruntled members of the supply chain or even a lone wolf operating from their bedroom.

Cyber attacks can lead to the loss of intellectual property, endanger cash flow and have a negative impact on a firm’s corporate reputation

However, many firms are failing to take the proper precautions to ensure the information stored on these devices are protected. A more robust approach is therefore needed to online security to protect the revenue, reputation and the long-term sustainability of the business. For any business involved in the building sector, a cyber attack can have a devastating affect.

It can lead to the loss of intellectual property, endanger cash flow and have a negative impact on a firm’s corporate reputation. Worst still, customer details could be circulated online.

The insurance industry has made significant progress over the past five years in developing cyber insurance products that protect companies from the growing cyber threat. These include a range of policies that mainly cover data breaches, rather than hacks that cause damage or production delays. Increasingly businesses are buying specialised cyber risk policies to supplement their existing insurance cover.

Cyber risk insurance normally covers the cost of restoring loss to business income or reputation caused by damage to computers and computer networks. Policies usually include assistance with, and sometimes management of, the incident itself, which can be essential when faced with reputational damage or regulatory enforcement.

Top tips from brokers to combat cyber crime include:

• Ensure your business has proper internet security in place including firewalls, anti-virus and anti-spam
• Test back-up plans and business continuity procedures
• Laptop computers and monitorsare common targets for thieves. If stolen this could mean lost data and lost productivity. Lock servers in a room and move laptops into a secure drawer at the end of a working day
• Encrypt important information for extra security so that only authorised users will be able to access them
• Purchase legitimate software from reputable companies and be careful when downloading free software
• Don’t open files on a website or email from an unknown or suspicious source
• Ensure you have adequate insurance in place to protect against a cyber attack. Affordable cover is available so speak with your broker who can arrange a suitable policy.

Having this protection in place could be the difference from a property professional staying solvent or going out of business all together.

Peter Morse is executive director at specialist broker Clear Insurance