What is Cyber Insurance?
Every business these days has some level of online presence or activity and an exposure to cyber crime.
Do you have an e-commerce site? Do you keep confidential client records? Do you email invoices to your clients, or receive invoices emailed from your suppliers? Do you have a Facebook page, or an Instagram account? There are numerous ways in which you can suffer a cyber crime loss, and the perpetrators are getting savvier every day.
What would happen if you came to work once morning, went to turn your computer on only to find a black screen and a simple message saying you’ve been hacked, pay up $15,000 within 24 hours or you don’t get your system back. Not only are you locked out, with no access to your files, your records, sensitive client information or able to operate, you’ve got to somehow cough up $15,000 just to get it back? Do you even have $15,000 available to pay the ransom?
This scenario is all too familiar in Australia now, along with almost daily examples of hackers getting into business systems and changing bank account details on invoices, or accessing private data including customer data.
What does Cyber Insurance cover?
In the majority of policies on the market currently, Cyber Insurance will cover financial loss to your business and customers and others as a result of a cyber related attack on your computer or online systems. Most policies include access to a 24/7 reporting and response team so that attacks can be notified and a response can be launched immediately, and expert IT advice can be provided to help you manage what happens next.
Often the cost of forensic IT experts can be substantial, and this just one important aspect of what is covered under a Cyber Insurance policy. It can also cover the cost to recover or replace data, PR costs to manage any public response to breaches, as well as legal defence costs amongst other things.
I have an IT company that manages all this stuff - why do I need Cyber Insurance also?
Hopefully your IT company is on the ball, and making sure your systems are water-tight, back-up’s and cloud storage is secure, scans for threats are regular and monitored etc.
But the vast majority of cyber attacks occur due to human error. It’s the staff member who opens a dodgy attachment in an email, or the manager who accidently leaves his laptop in the taxi on the way home from Friday night drinks, or the iPhone that’s stolen out of the car or your back pocket in a crowded market.
It doesn’t matter how good your IT company is, your security is only as strong as the people within the system, and people are fallible! Mistakes are always made, accidents will always happen.
Cyber Insurance is just one part of protecting your business from the very real and ever increasing threat of a cyber attack. Working with an experienced broker, who understands your business, your IT practices means a Cyber Insurance policy can be properly tailored to protect you best.
This article originally appeared on MeyerInsure Blog and has been published here with permission.
Advisr does not provide advice and does not hold a financial service license (AFSL). All information above has been provided by Laura Meyer.