Looking for a Cyber insurance broker? The Australian Criminal Intelligence Commission (ACIC) reports that cybercrime costs the Australian economy up to $1 billion annually in direct costs alone.
Think your business is immune? Think again.
The same research shows that the a Cyber Insurance and Cyber Security the average Australian company experienced 65 security breaches in 2018, up from 53 breaches in 2017. From ransomware and malware to phishing and stolen devices, the attacks range in severity and impact. Still, each can lead to devastating losses that affect a company both financially and operationally.
That’s why it pays to invest in the best cyber insurance Perth has to offer.
You’ve heard of paying to protect your car, home, business and other physical resources, but what about your virtual ones? How does this policy work and what does it include? More importantly, what doesn’t it include?
Read on to find the answers to these questions and more!
Why Do You Need Cyber Insurance?
Especially if you’re a small business owner, you already have plenty of costs to consider and bills to juggle. Why would you want to invest in something that you can’t even see, and tighten your already-narrow margins?
The answer is simple: You can’t afford not to.
Every sensitive or confidential record that your company loses to a cyber attack costs around $165 to replace. While this could wreak havoc on a large enterprise with thousands of such records, it’s equally calamitous for small-to-medium businesses (SMBs). In fact, research shows that 60% of cyber attacks that occur in Australia are against SMBs.
On average, medium-sized businesses pay $1.9 million every time they’re hit by a cyber attack. This doesn’t even include the hits they take to their reputation, customer loyalty, and employee morale. This money goes toward the following efforts:
- Customer notification costs
- IT systems remediation
- Crisis management
- Regulatory fines
- Extortion costs
- Lawsuit costs
Malicious hacker attacks might be the first scenarios that come to mind when discussing cybersecurity. However, keep in mind that there is not a one-size-fits-all cyber threat.
Yes, a hacker sitting in a dark room lit only by a computer screen can cost your company thousands in an instant. Yet, so could an honest employee who mistakenly attaches the wrong file to an email or inadvertently uses a copyrighted image.
While these risks are substantial, they aren’t completely unavoidable. Cyber insurance allows you to protect your assets as much as possible from such an attack.
What Does Cyber Insurance Cover?
Cyber insurance helps protect your company financially if it’s hit by a cyber attack. This policy can help cover the direct costs that your business faces, as well as any costs incurred during a cyber claim trial.
The two primary forms of coverage include”
- First-Party: Losses sustained directly by and to your company
- Third-Party: Claims filed against your business by people affected by your actions or failure to act
Before signing on the dotted line, as your cyber insurance broker to explain what the policy includes. While each agency that you research will have its own policy terms, most will include some form of protection against the following forms of threats:
The records that your company keeps on its employees and clients are some of its most valuable assets. That means they’re also some of your most vulnerable ones.
Filled with sensitive and confidential information that ranges from birthdays to addresses, these records should be inaccessible to anyone without authorized access. However, plenty of hackers manage to get around password protections, encryptions and other security measures. Then, when they seize these all-important records, they can sell them for a profit.
Meanwhile, your company is scrambling to pick up the pieces and recover from a humiliating data loss, while your trusting clients begin to panic. As they do, they begin to launch third-party claims against your company, demanding money to help recoup the loss of their:
- Personal information
- Employee information
- Confidential commercial information
- Information maintained by service providers (e.g. ISPs, cloud)
If you have cyber insurance, you can take a deep breath. Most policies will cover your defence costs and help you fight these charges in court.
The days following a cyber attack, network security failure, human error or programming error are normally spent assessing the damage and analyzing its impact. This requires the hands-on involvement of your IT staff and other key personnel. As those team members work to mitigate the damage, their core job duties might go on the back burner.
At the same time, you might also have hardware or software that’s damaged during the attack. This could make it nearly impossible to perform your day-to-day work efforts.
As a result of this loss of access, your profits could take a sudden dive.
However, if you purchase a policy through a reputable cyber insurance broker, the loss will be minimal. These payouts can help sustain your business as it works to get back on its feet and resume normal activity.
Though he’s mostly working on a keyboard behind the scenes, a hacker can still cause incredible damage to your physical assets, including your core systems. A single virus could wipe out your entire network and leave whole departments helpless.
Your cyber insurance policy will help you recover any systems that were lost, destroyed or damaged during the event. These might include your IT records and data, or your IT systems. In addition, this coverage normally covers the costs incurred to hire a security consultant or IT forensic specialist to help you track down the origin of the attack.
Your hardware damage policy also extends to the retrieval, restoration, repair or replacement of any systems or hardware required.
Damage Due to Hacking or Virus
It’s no secret that a go-to move of hackers around the world involves hacking into critical computer systems. They can also infect them with a virus to make them easier to attack.
When this happens at your company, it can leave you feeling helpless and exposed.
A cyber insurance policy can help cover the costs you’ll face, including:
- Liabilities that arise after a virus or hacker attack
- Data loss or theft
Look for a policy that covers all kinds of attacks, whether they originated with your in-house team or a third party.
Your company’s reputation is derived from many sources, including your print marketing and digital marketing efforts.
Unfortunately, in today’s always-on world, it’s all too easy for a hacker to obtain access to the same platforms, using them to spread libel, slander or defamation about your company.
Even if the message they’re spreading is entirely untrue, they could use deployment methods so sleek that it will be hard to convince the public otherwise. This could result in profit losses and the end of your good name.
With cyber insurance, you have the financial freedom to fight these claims in court. Most policies will cover your defence costs so you can stand up for your rights. You’ll also have the power to fight any kind of infringement on your copyrighted works, including your trademark and trade names.
Cyber extortion describes any scenario when a hacker demands payment by issuing a threat against your company. In most cases, this means accessing your data, website, hardware or other sensitive items, and holding them hostage until you meet their requirements.
In this case, most cyber insurance policies will cover your ransom. They will also support you financially as you negotiate or mediate such a security threat. In the event that you require the involvement of a crisis management team to cover the threat, the policy will pay for that assistance, too.
A privacy breach could set your enterprise back significantly, especially as you work to put the pieces back together and restore your good standing with employees, partners and clients alike.
After such a breach occurs, recovery costs could run the gamut. Some of the most common payments you’ll make will go toward covering breach costs, such as:
- Identify theft monitoring
- Credit monitoring
- Forensic costs
- Data restoration costs
Fines and Investigations
If your business has to pay a fine or penalty to any regulatory body as a result of a cyber crime, your insurance policy should help cover it. The same applies to any costs you rack up as you prepare your defence and investigation.
Due to their virtual nature, it can be difficult to track the actual perpetrator behind a cyber attack. Many times, companies will issue rewards for anyone who has information that can help solve the case.
You can use your cyber insurance company to pay out that reward.
Brand and Personal Protection
In one second, a cyber attack could ruin your great name that took decades to build.
From there, the road back into the public’s good graces can be a long and rocky one. With cyber insurance, you can partner with a public relations consultancy to lessen any damage to your brand. This same team can help you keep your C-suite executives away from any negative publicity to protect their personal reputation, as well.
What’s Emitted From a Cyber Insurance Policy?
Each policy will have its own terms, but let’s take a look at a few costs that most aren’t designed to cover.
Even if your current security measures aren’t up to boot, you won’t be able to claim a payout for lost profits that you foresee experiencing in the future. Most policies are only designed to provide direct support in the aftermath of an actual security event, not one that you believe might happen in the future.
Rather, you’ll need concrete evidence of the loss, along with real numbers of the direct costs incurred, before you can receive compensation.
Intellectual Property Losses
Most cybersecurity policies are designed to help mitigate the risks of losing large customer databases. That said, it’s possible for your intellectual property (IP) or trade secrets to fall into the hands of a data thief and lose value as a result.
When this occurs, it can be challenging to estimate and underwrite such a loss. As such, most agencies won’t cover this scenario, sticking instead to customer- and client-centric concerns.
After a security event happens, the vulnerabilities in your existing IT systems might become glaringly obvious. Suddenly, you realize that it’s time to invest in more advanced technology and newer equipment. You’ve relied on outdated, legacy systems for years but they just aren’t secure enough anymore.
This is an excellent step toward fortifying your company against a future attack. However, your insurance policy usually won’t cover the price of upgrading those hardware and software platforms. Nor will it pay for you to improve your security plan or training program.
While the investment is more than worth it, these are costs that you’ll normally cover on your own.
Find Cyber Insurance You Can Rely On
In today’s fast-paced world, business leaders all around the globe are making deep investments in advanced technology systems designed to help them outperform the competition. As their technology infrastructures continue to grow, so too should their cybersecurity measures.
While it might be a relatively recent offering, cyber insurance should be a key element in your enterprise-wide security approach.
When you purchase a policy, you can take an important step toward protecting your employees and clients, keeping their confidential electronic data as secure as possible.
Looking for a team of tech-savvy insurance consultants to help guide you toward the right plan? That’s where we come in.
Located in Perth, Sydney and servicing all of Australia, Grace Insurance is the region’s premier insurance resource, delivering top-notch solutions to help cover all aspects of your home and business. Contact us today to learn more about our cyber insurance coverage and let’s connect!
Grace Insurance does not accept any liability arising out of any reliance on the information in this article. We urge you to consult your insurance broker for personal advise, as we only provided general advise.