Claims Today: December 2017

Spotlight on Cyber Claims 
2017 has seen huge growth in the volume of cyber claims handled by Hiscox, with a 50% increase on 2016 volumes.

Cyber is not just an issue for the likes of TalkTalk and Uber – it affects small businesses too. The overwhelming majority of claims we have handled in the UK have been for small and mid-sized businesses, with many for customers with 10 or fewer employees.

The single biggest cause of claim is ransomware. Ransomware is a type of malicious software which can encrypt its victim’s files, or in extreme cases disable computer systems altogether. As the name suggests, ransomware is always accompanied by a ransom, demanding money in exchange for software which will restore the victim’s IT systems to their previous state.

While the ransoms are typically for modest sums, these incidents can be hugely disruptive. At Hiscox we have a cyber response team available 24/7 to ensure that our customers get back on their feet as quickly as possible.

We expect to see this trend continue in 2018. Cyber claims volumes will continue to grow and ransomware will continue to make up a significant proportion of these claims.

CASE STUDIES

Private clients

The Claim
Our insured was on holiday when their car was broken into. A number of items were stolen from the boot, including their house keys and a very sentimental teddy bear belonging to our insured’s son. The insured’s little boy was extremely frightened that the thieves would come to the house as they had they keys.

What we did
We quickly arranged for an emergency replacement of the house locks with the support of our Home Emergency team. We were also able to help the customer share photos of the missing teddy bear around the local area and with the local authorities as it held such significant value to their son. Unfortunately the bear has not been found, but we sent a personal hamper including Hamley’s vouchers so a new teddy bear could be chosen. 

What the customer said
“Thank you so much. A lovely, kind thought that is really appreciated.”

Professional Indemnity

The Claim
The insured provided cosmetic and beauty treatments. The claimant had issued proceedings in relation to a thread lift treatment performed by the insured.

What we did
The insured was keen to settle this matter and avoid litigation. We acted quickly following receipt of the claim form and prepared a settlement offer to the claimant. We agreed a without prejudice settlement for half of the amount originally claimed, with no admission of liability. The court proceedings were discontinued before the formal acknowledgement was due to the court.

What the customer said
“Many thanks for your help.”

The Claim
Our insured is a firm of accountants. One of the insured’s former clients threatened to bring a claim against it for approximately £1million. It was alleged that the insured had provided negligent tax and accounting advice over a number of years. The insured received a request from HMRC to discuss its former client’s tax position and for access to its records in respect of the client.

What we did
We worked closely with the insured in order to consider the insured’s position in respect of the claim. We drafted a response to the claim setting out a number of grounds of defence for the insured to send to the claimant. We also assisted the insured in liaising and corresponding with HMRC. After sending the response to the claim that Hiscox drafted, the claimant has not sent any further correspondence to the insured.

What the customer said
“I am pleased to say that I have not had any further communications from the former client. Hopefully it will remain that way. Can I also add that the claim service has been excellent in handling this case, especially as when I first received this claim it was an extremely worrying period for me. Many thanks.”

The Claim
Our insured, a graphic designer, designed marketing material for one of its clients. The insured obtained the appropriate licences for photographs used in that material. It subsequently received a complaint from an individual claiming they owned intellectual property rights for one of the images used. The complainant demanded significant damages to compensate them for the alleged infringement. The insured’s client was understandably concerned about the allegations.

What we did
We swiftly confirmed cover in respect of the claim and advised the insured on the merits of the claim. The complainant had problems with establishing that they actually owned the rights asserted and, in any event, the amount of damages sought was highly unreasonable. We drafted correspondence for the insured to send to the complainant rebutting the allegations and were able to negotiate a settlement with payment of a nominal sum to dispose of the claim. The insured’s client was reassured and the insured relieved to resolve the issue. 

What the customer said
“Thank you very much for all of your advice and guidance. We really appreciated it and I’m sure without it this wouldn’t have been resolved so cleanly.”

 

All figures correct for November 2017. Claims are dealt with on a case-by-case basis and are subject to the terms and conditions of the policy wording. For full details please read the policy wording. Hiscox Underwriting Ltd is authorised and regulated by the Financial Conduct Authority.  12/17