What is Cyber Protection Insurance?

 

As technology advances, so too do the potential risks to your business’s cyber security. Facebook’s launch of Messenger in 2011 invited the global issue of Facebook lottery scams. The introduction of alpha tags in Australia resulted in a fake SMS phishing scam to collect personal data by using the alpha tag ‘Medicare.’ In 2018 an app was created which allowed for AI generated material such as accurate facial reconstructions to be applied to a video or moving image. In 2019, this Deepfake technology was used in International Business Email Compromise scams. While security measures may not be able to keep up with the progress of technology, Cyber Protection insurance is a type of cover designed to protect your business from the financial impacts of a cyber security breach. 

Why is it important?

For a business to operate efficiently, a reliance on technology is unavoidable. Your business’s information may be collated, stored, and accessed through electronic records, emails, or a website. This may include the intellectual property of the company or ‘clients’/customers’ confidential information. Hacking or data breaches that expose this sensitive or private information could result in significant costs to your company. In 2019, Scamwatch reported a 34% increase in financial losses from 2018, with a total of $143 million lost. The average loss reported to ScamWatch was $7224 in 2019, increasing by 20 per cent from 2018. As technology’s influence and the associated risks continues to advance, so too do business’s financial losses.

The impact of a cybersecurity breach extends beyond purely financial loss, having the potential to tarnish a business’s reputation. It is important for clients to know that the information they share with your business is secure, and that the proper measures are in place for when a breach of cyber security does occur. 

The Privacy Amendment (Notifiable Data Breach) Bill 2016 also creates a legal obligation for any breach in security that could disclose personal information or result in unauthorised access to be reported to the Office of the Australian Commissioner and those affected within 30 days. While cyber security threats evolve with technology, so too does legislation aimed to protect innocent stakeholders, making it essential to ensure your business complies with its obligations to responsibly manage data breaches. 

Now more than ever

With more employees working from home now more than ever in response to the coronavirus outbreak, a greater reliance is being placed on technology and online communication. It is especially important to ensure your business’s cyber protection measures are adequate in dealing with these unprecedented circumstances. 

The role of Cyber Protection Insurance

Perhaps an employee ignores internal policies set in place and opens a file sent in an email. This file contains a Ransomware virus which blocks you from accessing your systems until a ransom amount is paid. You might decide it is easier to pay the ransom to restore the system. Or perhaps you hire external IT professionals to recover back-up data and files. However, this takes time, and until then, you are locked out of the system and business operations are halted. Both responses require significant expenses to be paid, including revenue loss, ransom payment, forensic investigation, and restoration services. 

Additionally, a client is not pleased with the delay in operations, costing them money as well. They are threatening to sue for the delay, incurring further legal expenses and compensation. 

Cyber Liability insurance provides financial protection for these expenses, including the costs of business interruption, forensic investigation and data recovery, extortion, costs involved with restoration of your business’s reputation, legal expenses, and mandatory notification costs. 

What isn’t covered

It is important to note that exclusions and the excess paid will be dependent on the specific insurer. Generally, policies will not include:

• Computer hardware damages
• Any criminal actions committed by you or your business
• A data breach which you have previously been made aware of
• Money stolen directly from you through the internet

Ceberos Brokers will determine any further exclusions that are specific to your policy.

Hopefully, you now have a more detailed understanding of Cyber Protection insurance and its value in the modern workplace. With the constantly changing nature of technology and the associated cyber security risks, it can be difficult to navigate the policy that your business may require. By contacting Cerberos Broker, we can help you find the most suitable policy that meets the specific needs of your business. Get in touch today!