KIRKLEES firms have been urged to protect themselves against the rising risk of cyber crime as new research shows the true cost of this 21st century economic threat.
The warning from West Yorkshire’s Bluefin Insurance Services follows research by the Cabinet Office which found that more than 75% of the economic impact of cyber crime in the UK is felt by businesses and that breaches and malicious attacks cost UK firms £21bn a year.
According to the report, the most common forms of cyber crime are theft of intellectual property, industrial espionage, extortion and theft of customer data.
It stressed that the true cost of cyber crime to UK businesses could be much higher as many incidents go unreported as there is no legal requirement to report incidents to the Information Commissioner’s Office.
The government figures are supported by further research released by the Ponemon Institute, which indicates a 7% rise in the cost of data breaches over a 12-month period. It found that 77% of UK firms suffered at least one data breach over the past year at a cost of £112 per record lost.
One of the most serious incidents occurred in October last year when insurance company Zurich was fined £2.27m by the Financial Services Authority after losing 46,000 of its customers details on an unencrypted back-up tape. In a similar incident in 2009, the Rural Payments Agency was sanctioned for losing the personal details of more than 100,000 UK farmers.
The government has introduced legislation to enable the Ministry of Justice to fine organisations up to £500,000 for losing customer data.
Peter Castle, head of customer proposition, at Bluefin, said: “Cyber crime is an increasingly serious problem, but many traditional insurance policies could leave businesses vulnerable in the event of an attack.”
He warned: “Even the smallest business can accumulate critical information and sensitive customer details on its computer files and the loss of these information assets could have a catastrophic effect on the business and its customers.
“Historically, most policies cover against physical loss or damage and, as a result, won’t protect against electronic risk exposure as data is virtual and intangible.
“However in the past year or so, a small number of insurance companies have responded by developing policies that cover additional areas such breach of network security, privacy liability and cyber extortion.”