Data Backup, should it be mandatory when taking a cyber insurance cover?

data insurance

2017 saw cybercrime surge to an all-time record high. The year highlighted the importance of consistent and proper cyber security measures. In this increasingly digital economy, the value of data is increasing exponentially day and night. Meaning losing yours to the wrong hands could have serious economic and legal implications. At the same time, criminals stand a chance to gain economically if they get hold of valuable data; of course that comes with heavy legal risks if apprehended.

These days, data protection has become paramount, with every company or personal employing the best level of cyber security at their disposal. Many organization have taken a step further to take cyber risk insurance or the Cyber Liability Insurance Coverage (CLIC) to cover themselves from the financial losses should they lose their data or suffer some reputation damage.

The thing with data is, once you lose it, you cannot restore it unless you had a backup. Businesses stand to lose a lot if they lose their data, especially if the data contains sensitive information about their operations and customers. Losing such data could lead to massive damage in terms of brand reputation and customer security.

To prevent carelessness and outright unprofessionalism in the industry, there are several regulations in place like the Protection of Personal Information (PoPI) Act and the General Data Protection Regulation (GDPR). Such regulations govern how businesses collect, store, protect, and use data they aggregate from their customers, employees, suppliers, and other business partners.

Failure to comply to these regulations usually leads to serious ramification both legally and economically. Take South Africa, for instance, there are companies that have been fined as much as R10 million and culpable people imprisoned over PoPI infractions. There have been cases of businesses being fined as much as 4% of their annual global turnovers for GDPR infractions; not forgetting the additional personal lawsuits by individuals affected.

 

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