Cyber Crime and Cyber Spying cost the global economy $3.8bn annually [Centre for Strategic and International Studies], with hacker attacks on websites growing steadily year on year. The number of victims in Australia alone reached 5 million in 2013.
While you can’t prevent your business from becoming the next target, you can protect yourself against costs incurred if this does happen.
What is Cyber Insurance?
Cyber Insurance is an insurance product used to protect businesses from risks relating to information technology infrastructure and activities. It is a specific insurance policy designed to cover against losses incurred as a result of data destruction, extortion, theft and hacking.
Cyber Insurance can help your company survive rising cyber crime threats, with minimum losses.
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The Importance of Cyber Insurance:
The number of detected cyber attacks skyrocketed in 2014 — up a staggering 48% from 2013 [Study: Cyberattacks up 48 percent in 2014 The Hill.com]. As this type attack continues to dominate the headlines, it’s natural for business owners to wonder if their business could be the next target.
There is no ‘typical’ company that is targeted and no ‘typical’ attack that we can defend against. As a business owner you must be vigilant. A comprehensive insurance policy can help protect your assets and your business against considerable financial loss.
What Risks May a Cyber Insurance Policy Cover?
One of the most talked about topics of the year, cyber crime poses a huge threat to businesses in the digital age.
As we move more and more online, the threat of a cyber attack is ever increasing. Cyber Insurance will cover the costs incurred by your business in the event that it is a victim of cyber crime. Some examples of situations that Cyber Insurance may cover are:
- An online retail store is hacked and customer records are obtained. The cyber criminals who carried out the attack threaten to release its customer records online, including names, addresses and bank details, if the business doesn’t pay. Cyber Insurance may cover the costs of resolving this matter.
- Criminals hack a restaurant’s point of sale machines and record credit and debit card data, which they sell on the black market. Cyber Insurance may cover the costs associated with the system being down and reinstated, as well as any legal costs incurred as a result of the leaked information.
- A small law firm with an old website built in Adobe Reader is taken down by hackers. Cyber Insurance may cover the costs incurred as a result of the website being offline.
- A private medical practice has its patients’ records stolen and released. Several patients take legal action against the medical centre as a result of the breach, costing the business thousands in legal fees and compensation payouts. With an appropriate Cyber Insurance policy in place, these costs may be covered by the business’s insurance.
Who Needs Cyber Insurance?
As the world becomes more digitalised, most businesses rely on the Internet, email, websites and computer software to operate. Small to medium sized retailers are particularly susceptible to cyber attacks as their security systems are easier to infiltrate than their larger counterparts, and they don’t have the administrative, financial and legal resources to fight back.
Today’s SMEs run the risk of being a victim of cyber crime, with the industries most at risk being those that hold personal or sensitive information on a lot of people, or those using cloud & IP solutions. Some of the industries most vulnerable of a cyber attack are:
- Retail and Online Stores: Retail is the top industry compromised by cyber crime. Retail stores are an attractive target for hackers as they store a huge amount of customer information, all of which is correct, up-to-date and complete; often stored alongside the customer’s credit card number. This data is extremely valuable to hackers.
- Medical Businesses: Hackers target the medical industry for a number of reasons. Medical records contain a wealth of information including Protected Healthcare Information and Personally Identifiable Information, which can be sold for a high value on the black market. Combined with the vulnerability of software in the medical industry in comparison to other sectors, it has become an extremely lucrative target for cyber criminals.
- Professional Services: Hackers are interested in the in-depth user and client data stored in the IT system of businesses operating in the professional services industry. This industry is a particularly attractive target for a cyber attack due to the amount of detailed information that is held on each client, which can be sold on the black market for a considerable price.
- Corporates Using Clouds & IP: Cyber criminals are aware of the amount of critical information that is stored in the cloud, from sensitive corporate data such as passwords and financial statistics, to business secrets and personal information. Clouds are attractive targets for cyber criminals as they cannot be protected by conventional security precautions such as firewalls, and they are often attached to a number of other devices, which hackers can penetrate once they are in.
What Are the Key Things That May Be Covered By a Cyber Insurance Policy?
PSC Direct offers specific insurance packages that cover key issues that your business may face in relation to using and protecting data and utilising digital media and communications.
Coverage will differ from policy to policy, but below is an outline of the features commonly covered by Cyber insurance:
- Privacy Protection: Protecting you against third party claims arising from a failure to keep data secure.
- Breach Costs: Reimbursement of your own costs when a data breach occurs.
- Business Interruption: Compensation for lost or reduced revenue while the business is out of action.
- Cyber Liability: Covering third party claims as a result of content in email, on the intranet, extranet or website.
- Hacker Damage: Reimbursement for costs to repair, replace or restore systems and data as a result of a hack.
- Cyber Extortion: Payment of ransom demands, and specialist consultant fees, where a hacker holds, or threatens your network, programs or data.
How PSC Direct works for you
As specialist small business insurance brokers, PSC Direct uses our considerable experience to provide multiple quotes for you. Combining our expertise insuring thousands of other similar businesses with our detailed database of insurers and insurance products; we’re best placed to advise you on the right insurance for your business.
We have strong relationships with the leading underwriting agencies and insurance companies. We can source the most appropriate business insurance policy for you, covering you for what you really need, at the right price.
We can help sole practitioners, small, medium and large businesses protect the businesses you are growing and ensure your assets are covered in the event that disaster strikes.
With our strong relationships to a broad range of highly-rated insurers we are able to advise you on business insurance, professional indemnity insurance, and professional indemnity insurance specifically tailored to meet the risk exposure of your business.
We can also provide advice on a range of additional insurance policies and cover that can affect your business and make sure you have the right insurance at the right price.
72% of Australian businesses fail after experiencing a major loss.
The right business insurance will ensure you are not one of them.
While good insurance covers you for most things – Professional Indemnity, Professional Liability and Property, great insurance covers you for the specific risks that your business faces. We understand that every business is unique and you need a policy that addresses the specifics. We make sure that when you have a claim that’s out of the ordinary and complicated, you’re covered.