Member Article

Cyber crime warning for North East businesses

Businesses in the region have been warned 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 comes from Bluefin Insurance Services which has offices in Newcastle and Stockton.

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.”

New research by the Cabinet Office found that over three-quarters of the economic impact of cyber crime in the UK is felt by businesses and that data breaches and malicious attacks are costing UK businesses £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. And the true cost of cyber crime to UK businesses could be much higher as many incidents are not publicly reported as there is no legal requirement to report incidents to the Information Commissioners Office.

The figures are supported by further research released this week by the Ponemon Institute which indicates a seven percent rise in the cost of data breaches compared with the same period last year with an average cost of £4.4m per incident.

The Institute found that 77% of UK businesses had suffered at least one data breach over the past year at a cost of £112 per record lost.

As businesses across all sectors of the economy increasingly rely on email and the internet, the potential damage from accidental data breaches and malicious ‘cyber’ attacks from organised crime has risen dramatically.

In the past year there have been a number of high-profile data breaches. One of the most serious incidents occurred in October when insurance company Zurich was fined £2.27m by the FSA 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 over 100,000 UK farmers.

This was posted in Bdaily's Members' News section by Ruth Mitchell .