Cyber risk in Tech: data loss, human error and insurance coverage

As a professional in a tech company, you understand better than anyone how to handle your organisation’s data and that of your clients. Data often represents a significant part of a company’s value, and losing it can have serious consequences for business continuity.

Consider, for example, lost or corrupted data and the resulting business interruption. It is important to know that the reconstruction of data itself is generally not covered under a cyber insurance policy. What is usually covered are the labour hours required to restore clean and usable backups. If those backups are missing or prove to be unusable, the impact can be substantial.

Although tech companies typically invest heavily in security, they are not automatically better protected in practice. Due to their larger digital footprint and access to client systems and data, IT and technology companies face a higher likelihood of cyberattacks and are more often specifically targeted than the average SME. As a result, their cyber risk exposure may be higher.

Human error also remains a real risk. For instance, an incorrect configuration during a data conversion may corrupt data and render backups insufficient to restore information. In such situations, the cost of rebuilding data is generally not insured. Coverage usually focuses on loss of profit resulting from business interruption and, in this case, the restoration of systems and the recovery of clean and available backups.

This is precisely why it is important to clearly understand what is and is not covered under a cyber insurance policy. Not every loss caused by human error is automatically covered, and the exact scope of coverage strongly depends on the policy terms and the tech company’s risk profile.

Questions?
Would you like to know which insurance solution best fits your organisation? Please contact Sandy Buurman-Drenth, Senior Account Manager TECH, at +31 (0)6 387 258 41.