Why should accountants purchase data protection insurance?
The ICAEW has been a great advocate of data protection and data security, so much so that in 2014 the Government’s Cyber Essentials certification scheme was formally launched at The Chartered Accountants’ Hall.
So why is the ICAEW so proactive?
The reason is accountants process and control large amounts of personally and commercially sensitive data and, unless they are still operating with manual ledgers and typewriters, they can only function if their IT systems are functioning. Therefore data breaches and cyber incidents could be catastrophic for accountants, their clients, and the reputation of the industry as a whole. All of this combined with the additional responsibilities of GDPR and ‘making tax digital’ makes accountants even more at risk.
Accountants have long appreciated the importance of professional indemnity insurance to cover claims of professional negligence, errors & omissions, they are now also insuring against the risks and consequences of criminal and accidental data breaches and cyber-crime. So what can a data or cyber insurance policy cover:
- Emergency support from technical experts to find the problem, stop the problem and restore systems & data
- Lawyers to deal with litigation and regulatory breaches and assist with ongoing legal, regulatory and compliance issues
- A crisis management team to handle immediate incident response, public relations and notification of data subjects
- Payment of fines, penalties and ransoms
- Refund of lost income / business interruption and money that has been fraudulently stolen.
Without such cover your firm would have to handle the chaos & confusion of a data breach, communicate with regulators, clients & the press itself before even considering the costs.