Data breaches have increased dramatically in the last few years with a growing number of Australian Businesses affected, some businesses are now choosing to cover themselves against information breach by taking out specific cover for Cyber Insurance. This is because the general corporate insurance that businesses use do not cover loss against unauthorized access to your personal data, including that of your employees and customers.
So, if you’re operating in Australia, transact online and/or have an online presence, here are the 9 things you need to know about Cyber Insurance:
- Your general insurance won’t cover you against information breach
- Cyber Insurance can replace risk management teams
- Cyber insurance covers more than you think
- Small and medium scale businesses are the common targets
- How are policy premiums determined
- Difference between tangible and intangible insurance
- Perform risk assessment
- Find a knowledgeable insurance broker
- Get value added service from your insurance broker
No typical general corporate insurance policy will cover you for loss against information breach, virus attack, or any kind of unauthorized access to the personal data of your business. Cyber insurance fills this gap, and picks your business up from where the general insurance leaves, in terms of protection for online activities.
The reason why general insurance policies don’t cover cyber theft or data loss is because these are not tangible assets, which is what general business insurance historically has aimed to protect.
While big business corporations can invest huge resources in developing entire departments for risk management, small and medium businesses have limited resources. It’s not viable for small and medium businesses to create risk management teams or devote significant energies into risk management, when risk management via cyber insurance can be obtained fora fraction of the cost and time.
Depending on your business needs and whom you partner with for insurance, you can get more than just first and third party coverage. Some cyber insurance policies in Australia can also provide cover against business interruption, damage repairs etc. Moreover, the most beneficial feature of the Cyber insurance is that it can help you meet business expenses till your business resumes its operations.
Many and small medium sized businesses that are aware of Cyber Insurance believe it is only needed for large multi-national organisations. But, according to statistics it is small and medium businesses that are targeted by hackers and data thieves most often. Further, unlike big businesses in Australia, that have multiple lines of production,most small businesses don’t have the ability to divert funds from one division to the other so the impact of cyber-crime can prove devastating.
Cyber policy premiums are largely determined by the size of your organization and the industry you operate in. For example, companies that are doing significant online business and storing huge volumes of data are considered higher risk businesses. The risk involved is high also because they need to safeguard confidential customer information. Also the greater the importance of online activities to a business the greater the impact on the business if they are affected by cyber-crime. The greater the risk, the higher is the premium and vice versa.
What most general corporate insurance policies cover is tangible assets like property buildings, computers, laptops etc. Information is looked upon as an intangible resource, and hence is not valid to be covered under general insurance.
Performing risk assessment and implementing a risk protection strategy can save you lots of money when purchasing cyber insurance cover. You can identify and minimize the gap between security and protection required and then invest in the right Cyber Insurance policy.
A specialist business insurance broker understands Cyber insurance and can break down its components into offerings that suit your business. They can help you identify all the risks, and validate your seeking of a Cyber Insurance policy.
Specialist insurance brokers can offer you the convenience of providing benchmarking services for your industry segment, and refer you to providers that can provide assistance for installing firewalls.