Does Cyber Insurance Cover Damage to IT Equipment?

If your work laptop or phone suffers loss or damage and your company has numerous insurance policies, which one do you claim on?

Cyber insurance does not cover physical or accidental damage to IT equipment. If your employee working at home spills their coffee on a company laptop, or accidentally deletes some files, you won’t be able to claim on your cyber insurance.

When you take out cyber insurance, you are protecting the data stored in these devices against intentional criminal activity and hacking.

In this article, we’ll answer questions such as:

• Is my company laptop covered by cyber insurance?
• Do I claim on my cyber insurance if I lose my phone?
• Does cyber insurance cover intentional damage to laptops?

Before you make a claim on your insurance, you need to make sure exactly what your individual policy does and does not cover. Talk to us if you need assistance figuring it out.

Laptops and phones and business insurance

As more people work from home, any company-owned IT equipment they bring into their living spaces suddenly face more risks than when those items are stored and used exclusively in an office.

Toddlers, pets, leaky roofs and non-standard office furniture may all potentially contribute to accidents or unforeseen damage to company IT equipment. But while you should absolutely have insurance to help pay for these items, you will not be able to make a claim on your cyber insurance.

That’s because cyber insurance does not actually protect physical objects: only the data they contain. Laptops and other devices fall under the remit of contents insurance in the home, and should be covered by a comprehensive business insurance policy.

Likewise, if a storage device such as a USB stick or hard drive is left on public transport or is stolen from your employee’s house, your cyber insurance will not cover the cost of replacing the item. It will, however, help you mitigate the consequences of the data compromised.

Accidents and intentional damage

Cyber insurance covers cyber crime specifically, a phenomenon which is unfortunately on the rise. This means the data your company holds must be in danger of falling into criminal hands or obtained by criminal means to have protection.

This means that, no matter how much it costs you to repair the fallout, an employee accidentally deleting records or corrupting data is not covered by your cyber insurance. It’s up to the employer to ensure staff have sufficient data handling training to be able to avoid such mishaps. If that data was deleted due to a malicious attack by outside forces, this would be covered.

Your cyber insurance will absolutely cover employees opening a suspicious email, and becoming the unwitting target of a phishing scam. This is because criminals aimed to obtain the data via deception, and such phishing and malware attacks are insurable risks.

Employee fraud is different still. Your business insurance should cover most other criminal activities, not related to cyber crime. This is the kind of insurance you’d need to claim on if you discovered a staff member was embezzling funds, even though they may be doing so online.

This is because crime insurance policies cover the direct loss of your funds, whether through maleficence or employee dishonesty. Cyber policies, however, cover economic damages arising through a failure of network security or privacy controls which may cause indirect losses.

Always make sure your business has cover

Running a business, no matter if you’re a small local shop or a global corporation, comes with risks. As you accumulate profit, you may become the target of criminals who want to steal it.

The truth is, cyber crime is so little understood and so prevalent that small businesses are a more attractive target to hackers. The risk of facing consequences for a successful attack are relatively slight, and small businesses are less likely to have security measures in place.

Remember, it is no longer enough to make sure your IT equipment has insurance which guards against physical dangers such as fire and flood.

Talk to our Cyber Insurance experts today!

Get in touch with us at OCI.ie today, and we can help you find a cyber insurance policy that fits your business needs and protects your organisation from any future cyber attacks. We look forward to helping you today!