Compare Business Insurance that Covers Cyber Liability

Even if your business isn’t within the tech space, Cyber Liability insurance may still be worthwhile. After all, many businesses deal with the kind of sensitive or personal data that could be tempting for cyber criminals (or just plain unfortunate if an employee accidentally releases it).

You might need Cyber Liability insurance if you:

• Do your business via the web or an online platform, including selling products or maintaining an online presence
• Use email
• Deal with customer and other confidential data, including hosting, sharing, storing or transmitting
• Use EFTPOS machines
• Have records of a sensitive nature (including suppliers and employees) that could identify a person
• Have a high profile in your industry or have records of high-profile individuals that could be used for extortion

As futuristic (or conversely, how very 80s) as cybercrime sounds, it’s a very real possibility for Australian businesses. You might be targeted by criminals looking to get a hefty ransom payout or competitors hoping to clear you off the board. Additionally, sometimes cybercrime incidents happen from the inside — and by accident! Human errors can mean information, like financial records and confidential information, is leaked or unintentionally shared, leading to some serious headaches. It may even be enough to have you closing up shop one last time.

In 2022–23, the average self-reported cost of a cybercrime incident was $46,600 for small businesses and $97,200 for medium businesses.¹ Could your business afford to be out of pocket that much at any given time?

Things may be even more extreme if you’re found to breach the Privacy Act 1988 (Cth). Doing so may come with fines of up to $50 million, 30% of your company’s adjusted turnover for the period or three times the value of the misused information; whichever is the greatest.

Cyber Liability insurance doesn’t stop cyber incidents from happening. However, it could make it easier to shake off the damage and keep operating.

For example, if a denial of service (DoS) attack targets your business, your Cyber Liability insurance may help you recoup losses from your business being interrupted.

Your policy may also help cover the costs of a forensic investigation to track down a data breach and work out how much was affected. This may be integral to resecuring your network, along with ensuring you know what’s compromised so you can plan appropriately.

Even the Australian Government has had to come clean about data breaches, like an early 2019 incident that saw the Australian Parliament House network breached and employee credentials stolen. But a data breach is hardly top of anyone’s list of complaints about pollies. Of course, you might want people thinking of your business a little more favourably than they do of our political parties.

Your Cyber Liability insurance premium is at least partially linked to how high-risk your cybersecurity is in your insurer’s eyes. As a result, having a thorough and regularly updated cybersecurity policy may be more than just good business practice.

If you want to try and reduce your cyber security risk (and, in turn, hopefully lower your premium), there’s a few things you could try.

For a start, you may want to make it the norm to have multi-factor authentication to access online business accounts. Using unique passwords and a secure password manager could also become part of your day-to-day cybersecurity routine.

Restricting access to accounts could help you limit damage if an incident occurred. So, you may want to limit how many shared accounts you have as part of your operations, as well as trim back employees’ access to only what they need for their work.

Staying up to date with security software could also be a good idea. You may want to keep an eye out for new anti-virus and ransomware protection for your different devices. Of course, you’ll also need to get into the habit of using them if you want them to provide any kind of protection.

Keeping your network secure, like any servers, routers and cloud services, could also help to reduce your risk.

If you’ve already done the above or want some more ideas, you may like to use the Australian Government’s online cyber security assessment tool.

A Cyber Liability insurance policy is unlikely to cover everything under the sun when it comes to your business’ online life and dealings.

There are some circumstances where you aren’t covered, like interruptions caused by outages or failures of power, satellites and telecommunications technology. It should also go without saying that intentional and fraudulent acts aren’t going to make the cut too. This includes if you knew about certain facts or circumstances prior to taking out the policy — a little like trying to take out Home Insurance the day after your place has been flattened by a flood.

Finally, physical damage, both to people and property, isn’t likely to be covered either.

You can check what your policy covers by reviewing the policy wording.