Author: Robert Broxup

Cyber insurance protects against risks that come with storing and handling data. It covers business liability for data breaches involving customer or employee information, including credit card details, passwords, and personally identifiable information (PII). Cyber insurance claims could arise from either:

• An accidental privacy breach by an employee

• A situation involving hacking, extortion or ransomware

Cyber insurance can cover many financial costs, varying with each provider. Here are some examples of cover:

• Crime investigation

• Loss of income

• Legal costs

• Recovering lost data

• Restoring computer and security systems

• Locating and removing viruses

• Reputation management activities

• Extortion payments

• Third-party claims for damages

• Hiring IT specialists

Insurance companies conduct risk assessments and set premiums accordingly through a combination of factors, including:

• Actuarial analysis – consideration of historical data, industry trends, statistics, and various other factors to determine the likelihood of events occurring and associated costs

• Underwriting – evaluating individual insurance applications to accept, reject, or modify cover. Underwriting involves assessing the applicant’s risk profile considering many factors.

• Historical Losses – analysis of historical claims data to identify which types of claims are more likely and use the frequency and severity to influence the premium

Consequently, reducing insurance premiums is about mitigating risks and demonstrating to insurance providers that effective countermeasures exist. For motor insurance, this could include:

• Using a steering lock – a car is less likely to be stolen with a steering lock while parked and unattended. A car thief will likely move on to the next car without a steering lock.

• Advanced driving test – a certificate holder is less likely to cause an accident. The advanced driving test demonstrates a higher standard of driving than the standard DVLA test. Some insurance providers offer significantly reduced premiums.

Not all insurance providers offer reduced premiums for all types of risk mitigation, so it is still necessary to shop around. Reducing cyber insurance premiums also involves mitigating risks and demonstrating to the providers that your business has adequate controls. In a nutshell:

• Establish robust security controls to reduce the:
  • Likelihood of an incident
  • Severity of an incident
  • Overall risk

• Have the necessary processes and resources to:
  • Recover quickly from security incidents and losses
  • Strengthen controls to prevent reoccurrence

• Have the insurance policy as a backup

When applying for cyber insurance, you should expect to receive a detailed questionnaire from your insurance provider, like one that you may obtain from clients as part of their due diligence process or one that you might give to vendors as part of your due diligence. Also, expect a follow-up meeting with a security expert from the insurance company (or working on their behalf). This audit activity will allow the insurer to decide what cover to offer at a price that reflects the risk.

At the heart of this process is the requirement to establish credibility. A great starting point is to work within a specific framework and obtain third-party certification where available and appropriate to the business. Here is a selection:

• Cyber Essentials and Cyber Essentials Plus

• ISO 27001 Information Security Management Systems

• Payment Card Industry Data Security Standard (PSI DSS)

• National Cyber Security Centre (NCSC) Cyber Assessment Framework (CAF)

• National Institute of Technologies (NIST) Cybersecurity Framework (CSF)

• Control Objectives for Information Technology (COBIT) Framework

Obtaining a third-party evaluation of business maturity can add credibility to the current risk posture and provide essential information, such as the next steps in developing maturity and mitigating further risk. Not all insurance providers will recognise all the frameworks and certifications and may use a breakdown of controls when calculating premiums.

Here are some examples of controls demonstrating that your risk management, information security management, and risk posture are under control. These details provide a good starting point for building your case for reducing cyber insurance premiums.

• Implement strong network security, firewalls, and intrusion detection systems. Use strong encryption to protect sensitive data; both in transit and at rest. Deploy end-point protection.

• Employ multi-factor authentication (MFA)

• Regularly update and patch software and systems to address vulnerabilities. Remove deprecated or unsupported software from the estate. Establish vulnerability management practices and remediate weaknesses.

• Conduct regular security audits. Conduct penetration testing. Identify weaknesses, manage remediation, and continuous security improvement.

• Create and enforce clear policies and procedures for information security. Stay up-to-date with emerging threats and update countermeasures accordingly to protect the business.

• Have secure/air-gapped backup copies of data. Regularly test the restore process to make sure you can recover you data if needed.

• Provide security awareness training for employees to recognise and respond to threats. Create a security aware culture within the business. Evolve to the point where the people become the greatest strength in cyber defence.

• Define and document an incident response plan to address and contain threats. Regularly update and conduct tests to demonstrate readiness.

• Establish a 24/7/365 security monitoring regime. If this is cost-prohibitive because of a need to operate multiple shifts, consider partnering or outsourcing the security operations centre to a third party specialising in security monitoring and offering a round-the-clock or follow-the-sun service.

• Regularly assess your risk profile. Implement treatment plans based on the assessments. Identify and prioritise potential vulnerabilities and threats.

• Comply with data protection regulations such as the Data Protection Act the GDPR. Implement data protection measures to safeguard customer and employee information. Maintain a data breach response plan to meet regulatory requirements.

• Assess the security posture of third-party suppliers during the selection process and at periodic intervals to ensure they meet your contractual requirements and security standards.

• Establish a robust risk management framework and proactive measures to prevent security incidents. Continuously improve security posture in response to evolving risks and emerging threats. Update policies and procedures as needed to align with current requirements.

Information Security is a journey, not a destination, and the same applies to reducing cyber insurance premiums. By implementing strong security measures, demonstrating risk management practices, and working with insurance providers, it is feasible to:

• Obtain lower insurance premiums. Keep premiums to a minimum through a commitment to continuous improvement.

• Maintain an adequate level of insurance coverage. Review and adjust the insurance coverage and policy limits as needed to meet the needs of the business.

Avoiding untrustworthy vendors is sound advice, but it is not always straightforward to evaluate them ahead of making an online purchase for the first time. This article introduces virtual credit cards, the reasons for needing them, and how they work as a viable countermeasure to reduce or avoid fraud.

A virtual credit or debit card works in the following way:

• New bank account – you first need to open a bank account that supports this feature to use virtual cards. This part of the process is the same as other bank accounts. Your existing account may already include such a feature.

• Create a virtual card – using your bank’s online portal, create a virtual card. The virtual card will include the 16-digit card number, the expiry date and the Card Verification Value (CVV) number found on the back of physical cards. The difference is that your bank will create the virtual card instantly.

• Make purchases – use the virtual card details to make online and telephone purchases without disclosing your physical card details

• Delete your virtual card – deleting your virtual card will immediately block all further transactions. You can keep your card details for multiple transactions or delete your card once a single transaction is complete.

Reasons for implementing these countermeasures include:

• Online accounts that don’t allow card removal – as customers, you should have the option and the right to delete your card details, but in practice, many vendors have not implemented this and refuse to cooperate if you ask for the removal of your details

• Avoid subscription scams – some vendors have hidden terms and conditions that state that you are joining a club by making a purchase. Consequently, the vendor takes money from your bank account and adds it to your online vendor account, ready for future purchases. This type of purchase deviates from how people buy goods and services and, combined with the fact that very few people read terms and conditions on websites because they are too long and convoluted, this can catch people out. This kind of behaviour will show up when reading online reviews.

• Stealth auto-renewal – vendors often keep hold of card details and set payments to renew automatically without informing their customers, either during the initial purchase or ahead of renewals

• Reduced need to cancel physical bank cards – the option to create and delete virtual credit cards means that if anything untoward takes place involving your bank account, it will not be necessary to request a replacement card. Removal of virtual cards will eliminate the risk.

• Free trials – many services offer free trials and require the use of a credit or debit card so they can take payment from your account at the end of the free period unless you choose to cancel the service. You must ensure that you are not legally obliged to make payments if you fail to cancel a service explicitly. Use of virtual cards for trial registration followed by immediate deletion will offer protection against vendors that:
  • Make it difficult to cancel services
  • Mislead you into believing you have cancelled a service
  • Don’t respond to customer support requests for cancellation
  • Refuse to let you remove your card details

Banks are unlikely to investigate issues if you have given your card details to a vendor and will likely tell you to speak to the vendor to resolve the problem. The outcome will depend on the overall credibility and trustworthiness of the vendor.

Other countermeasures include:

• Looking for reviews online – vendors often have reviews and testimonials on their websites, third-party websites, and discussions on social media. Sadly, fake reviews are commonplace, so you can’t always trust what you read.

• Looking for online complaints – if a vendor misbehaves, refuses to cooperate with their customers in resolving problems, customers lose money, or gets upset for any other reason, complaints will find their way to review websites and social media

• Only having the money you need for the transaction in the account – works if your bank account doesn’t have any credit facilities attached to it, so you can never have a negative balance. The vendor can never take more than expected during the first transaction. Even with free trials, it is possible to have items added to your shopping basket by default or pre-selected checkboxes, including a surprise purchase.

Remember that when you give your credit or debit card details to a vendor, you have no control over how they store or use them.

Here are the changes to ISO27001 and ISO27002:

• ISO 27002:2013 contains 114 controls spread across 14 domains. The 2022 version includes 93 controls spread across four control domains. The new version has all the existing controls, but many merged to reduce the quantity.

• The following four control domains replace the 14 in ISO 27002:2013:
  • Organisational (37)
  • People (8)
  • Physical (14)
  • Technology (34)

• ISO 27002:2022 includes 11 new controls:
  • Threat Intelligence
  • Information Security for Cloud Services
  • ICT readiness for business continuity
  • Physical security monitoring
  • Configuration Management
  • Information Deletion
  • Data Masking
  • Data Leakage Prevention
  • Monitoring Activities
  • Web Filtering
  • Secure Coding

• Due to the control changes in ISO 27002 and the controls listed in Annexe A within ISO 27001, this section will need updating to fully align ISO 27001 with ISO 27002. There may be additional changes to ISO 27001, so it will require a careful review when formulating a transition plan.

These changes simplify the control set and remove significant overlaps between controls across multiple domains.

As a result of Brexit and the expiry of the transition period, the European Commission Taxation and Customs VAT Information Exchange System (VIES) system (http://ec.europa.eu/taxation_customs/vies/) is no longer available to GB registered businesses.

The new system for UK-registered businesses is here – https://www.tax.service.gov.uk/check-vat-number/enter-vat-details

Although many businesses still ask for a copy of the VAT registration certificate as part of their supplier due diligence process, it is essential to remember that the certificate only shows that a VAT registration existed at a single point in time. Please consider the following alternatives:

• Verify the VAT registration online as part of your invoice processing

• Verify the VAT registration at periodic intervals throughout the relationship with the supplier

• Use the online process while onboarding your supplier

The new HMRC service allows UK VAT-registered businesses to prove they have performed checks. However, this is not guaranteed to absolve companies of financial liability for any VAT paid and subsequently claimed, strengthening the need for increased vigilance. Businesses knowingly or recklessly participating in fraudulent VAT transactions can become jointly liable for the unpaid VAT.

You can report suspected VAT fraud here – https://www.gov.uk/report-vat-fraud