Cyber Risk Liability Insurance is designed to help protect your business from the financial impact of computer hacking or a data breach.
Living in the information age we collect, store and access information instantaneously around the globe 24/7. This access to private and sometimes sensitive information can significantly increase a company’s vulnerability to cyber security threats – any of which can result in significant out-of-pocket and reputational costs that can devastate the bottom line.
The reality is that Cyber risk is an exposure that no modern business can escape. Incidents of data theft, the accidental release of customers’ details, theft of credit card information and ‘Denial of Service’ attacks have the potential to suspend a company’s operations. The financial impact of system interruption, breaches of privacy and cybercrime events are now felt by businesses within all industries, no matter their size.
New privacy legislation introduced in February 2018 regarding mandatory breach notifications has only heightened the Cyber exposures faced by Australian businesses. The ever increasing complexity of Cyber risk facing businesses makes it essential to ensure your organisation is on the front foot to responsibly manage data breaches and efficiently deal with incidents and litigation.
Cyber Liability Insurance Australia covers:
- The costs of business interruption
- Forensic investigation and data recovery
- Extortion
- The crisis management costs involved with restoring your business’s reputation following a cyber attack
- Legal expenses associated with data breaches and systems break down, which may occur after being hacked or from the theft or from loss of client information
- Mandatory notification costs
Does my Business need Cyber Security Liability Insurance?
Does Cyber risk pose a significant risk to your business? Consider these real claims faced by Australian businesses:
Scenario
- Hardware Store with 20 employees and $5 million turnover
- An employee ignored internal policies and procedures and opened a seemingly innocuous file attached to an email. The next day the hardware store’s stock order and cash registers started to malfunction and business trade was impaired as a result of the network failing.
Problem
- Over $100,000 in forensic investigation and restoration services
- Incurred increased working costs of $20,000
- Business income loss estimated at $50,000 from impaired operations
Total costs associated with the event
$170,000
Scenario
- Engineering firm with 20 staff inc. 3 admin and an $18 million turnover
- The firm was infected with a Ransomware virus causing the server to become totally encrypted and inoperable
- A ransom was demanded for the equivalent of $10,000 in Bitcoin
Problem
- The firm decided to pay the ransom as it was discovered that there was no viable back-up of their data to restore
- Remote logins were not possible
- Once the ransom had been paid, the firm was provided with a decryption code which restored their system
Total costs associated with the event
$18,650 in IT expenses to restore the system from scratch.
Scenario
- Real estate agency with 6 staff and $8 million turnover
- The real estate agency had a Ransomware virus enter their computer system where the hacker demanded a payment of US$500 to be made
Problem
- The business was locked out of their system and all of their digital files were inaccessible
- The business was unable to function normally for 7 days
Total costs associated with the event
$7,440 to cover the cost of restoring the system and files, payment of the ransom, as well as lost man hours.
If you have any further questions or you would like assistance in assessing your Cyber Liability Insurance needs please be sure to contact one of our Cyber Risk experts.