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These days even the smallest businesses need to be online and engaged with the digital world in order to operate. While this new age has opened up fresh opportunities for businesses around the globe, it’s also brought with it significant risks.
This is where cyber liability insurance comes in. A cyber liability insurance policy could help protect you from claims, and support your profitability in the event of a cyber breach or attack. It’s now common that businesses hold some form of customer data, whether it be emails, addresses, financial details, or other personal information. All of this is valuable to hackers who can sell or use this information for fraudulent purposes, so protecting this is often a priority of any relevant business.
In addition, businesses can be severely disrupted by ransomware, so putting in place measures to support your business during a resulting period of business interruption can be an important risk mitigation strategy.
Prior to making a decision on a level of cover, ensure you review the Product Disclosure Statement for details of policy inclusions, limitations and exclusions.
Cyber liability insurance is a type of business insurance product, which protects your business against both the legal costs and expenses (including compensation payments) related to cybercrime incidents. Your coverage may generally include cover for expenses and legal costs relating to the following*:
You may think that your small grocery store, online homewares shop, or one-man IT consulting firm is an unlikely target for cybercrime, but that’s not the case. Here’s some government statistics that give you a good idea of the breadth of cybercrime in Australia:
In short, few businesses are too small to be targeted. Like many of the other risks which businesses face, cybercrime can never be completely eliminated, only mitigated3. While prevention is a key part of any business’s strategy, ensuring you’re covered in the event of an incident is also important.
In the event of a cyber breach or crime, you may find yourself glad you purchased suitable cover, allowing you to get much needed financial support from your insurer.
The Australian Criminal Intelligence Commission (ACIC) website states after conducting a Cyber Security Review, they found that cybercrime is costing the Australian economy up to $1 billion annually in direct costs4.
The obvious exposures for your business from a cybercrime incident are claims by affected clients, and potential loss of revenue, as well as damage to core digital infrastructure. However, the secondary risks can include4:
The extent to which your business is at risk of a cyber-attack further increases with the size of your organisation, its public profile, as well as the amount and kinds of data you’re storing.
There are many different ways that an outside entity can perform a cyber attack on your organisation. Below are some examples provided by the ACIC4, as well as the Australian Cybercrime Online Reporting Network (ACORN)5:
Before you sign up for your policy, it’s vital that you understand what you’re covered for. Cyber liability insurance is a relatively new class of insurance product, so policy inclusions and exclusions may differ between providers.
Cyber liability policies can include the following*:
*Please note that all insurance is subject to the terms and conditions set out in the policy wording or Product Disclosure Statement. The information set out above is general only and should not be relied upon as advice.