Five Cyber Facts You Need to Know
Cyber insurance cover is a blended insurance product, built to protect clients from specific cyber related risks. It's a policy that's specifically designed to respond to costs the business may face as a result of cyber breaches. These might include the cost of first party losses, legal liability, declared party losses, business interruption losses and regulatory costs.
Let’s take a look at five things you need to know about cyber insurance before taking out a policy.
1. Cyber insurance can cover you for business interruption costs
If your business sells products and services online, or relies on systems that are connected to the internet to trade, cyber insurance will cover you for a range of events. These include if your systems no longer operate as a result of a cyber attack, or if you can't access them for a period of time. Cyber insurance reimburses the business for the income it would have earned during this time.
2. Cyber crime is on the rise and every business needs protection
According to the Australian Cyber Security Centre’s 2016 Threat Report, between July 2015 and June 2016 the federal government’s Computer Emergency Response Team (CERT) responded to 14,804 cyber security incidents affecting Australian businesses, 418 of which involved systems of national interest. In the previous year it responded to 11,073 cyber security incidents, which shows how cyber threats are on the rise.
Attacks can come from criminals, ‘hacktivists’ — political activists seeking illegal access to an organisation’s computer system — terrorists or state-sponsored hackers, or even disgruntled employees or customers. No business is immune to cyber threats and it’s important to have insurance in place because it’s a when not if situation when it comes cyber attacks.
3. Standard business insurance may not protect the business
Managers can erroneously assume other business insurance policies such as director and officer (D&O) or Crime insurance protect the business should it suffer a cyber attack.
While traditional insurance policies may respond to certain aspects of cyber breaches, none are specifically designed to protect companies from this threat. Therefore, it’s essential for businesses to take out this cover to protect their operations against an attack.
4. Never assume your business is safe
It’s true certain industries are more prone to suffering a cyber attack than other industries especially businesses that retain personal information. The 2016 Threat Report showed for the 2015/2016 financial year the energy sector experienced the highest level of threats (18 per cent) followed by banking and financial services (17 per cent) then communications (11 per cent).
No business or industry sector is immune. Cyber crime is now viewed by criminals as being just as lucrative as other types of crime and every company must be protected.
5. Cost-effective cyber cover is available
The cyber insurance market in Australia is very competitive, with a number of options available. Businesses with strong cyber controls in place and those that hold limited personal customer information are often able to obtain the most affordable cyber cover.
Being able to demonstrate to the insurer the business has strong IT protection such as robust firewalls and backup systems stands businesses in good stead when it comes to getting cost-effective cover.
1. Australian Cyber Security Centre, 2016, Threat Report.
This blog is not intended to be taken as advice regarding any individual situation and should not be relied upon as such. The information contained herein is based on sources we believe reliable, but we make no representation or warranty as to its accuracy. Marsh shall have no obligation to update this publication and shall have no liability to you or any other party arising out of this publication or any matter contained herein. Any statements concerning legal matters are based solely on our experience as insurance brokers and risk consultants and are not to be relied upon as legal advice, for which you should consult your own professional advisers.