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Cyber Insurance Fact Sheet
- Aug 14, 2023
- Views: 1096
It offers cover for both third party claims against your business (such as clients suing for breach of privacy, or action taken by the Privacy Commissioner); and first party cover for the expenses your business incurs following a cyber attack (including the costs of repairing and restoring your systems).
Do you really need Cyber Liability Insurance?
To understand if a Cyber Liability policy would be beneficial to your business, ask yourself the following questions:
- How valuable is your data? Do you store personal or commercially sensitive information about your clients, suppliers or your own business?
- How robust is your IT infrastructure? Is it up to date with the latest anti-virus protection software?
- Are you and your employees adequately trained on what to be aware of, how to prevent a cyber incident from occurring and recognising when a data breach has occurred?
- Do you have sufficient resources and an incident response plan to manage a cyber incident?
Did you know?
- From 2020 to 21, cybercrime was on the rise, with nearly 13% more cases reported than in the previous financial year. (Australian Government Cyber Security Centre, September 2021)
- Over 60% of Australian SMEs don’t survive a cyber-attack or data breach. (The Australian Small Business and Family Enterprise Ombudsman)
Professional Indemnity insurance is designed for professionals who provide a specialist service or advice, providing protection for financial loss and legal costs of a claim.
- Over 60% of Australian SMEs don’t survive a cyber-attack or data breach. (The Australian Small Business and Family Enterprise Ombudsman)
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- One cyber attack was reported every 8 minutes during the 2020-21 financial year, and they are more substantial than in previous years. (The Australian Cyber Security Centre, September 2021).
What is typically covered?
- IT forensic costs
- Data recovery costs
- Cyber extortion costs (including ransom demands from hackers)
- Notification and public relations costs
Third Party Losses Covers your liability to third parties following a data breach, including:
- Claims for compensation
- Legal and defence costs
- Costs arising from investigations by a government regulator
- Fines and penalties for breaching the Privacy Act
Business Interruption Covers lost profits as a direct result of a cyber event:
- Loss of income
- Business expenses
- Increased cost of operating your business
What is typically not covered?
- Bodily injury and property damage
- Prior known facts or circumstances Intentional or fraudulent acts
- Damage to computer hardware
- Upgrading of an application, system or network
- Failure or outage of power, utilities, satellites or telecommunication services
Always read the Policy Wording to understand the terms and conditions of Cyber insurance cover, including any applicable exclusions.
Claim Case Study
The hairdresser made a claim on their Cyber policy which triggered the optional Social Engineering cover. They were covered for $30,000 of direct financial loss as a result of the phreaking attack.
*This information is general only and does not take into account your objectives, financial situation or needs. It should not be relied upon as advice. As with any insurance, cover will be subject to the terms, conditions and exclusions contained in the policy wording. The provision of the claims examples are for illustrative purposes only and should not be seen as an indication as to how any potential claim will be assessed or accepted. Coverage for claims on the policy will be determined by the insurer, not BizCover.
All information above has been provided by the author.
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