According to Wikipedia "Cyber-insurance is an insurance based product used to protect businesses and individual users from Internet based risks, and more generally from risks relating to information technology infrastructure and activities. Risks of this nature are typically excluded from traditional commercial general liability policies or at least are not specifically defined in traditional insurance products."
Small businesses at risk from cyber breaches
Did you know that in recent years over 70% of Australian businesses experienced cyber crime? And that 40% were directed at small and medium businesses?
Cyber insurance is becoming more and more important for businesses as the implications of technology and cyber security risks become more severe.
Mandatory data breach notification regime now in Australia
As reported in Computerworld, "Australia will finally get a mandatory data breach notification regime after a government bill was .... passed by the Senate".
Under the legislation an eligible data breach is "is unauthorised access to, unauthorised disclosure of, or loss of, personal information held by an entity" where "the access, disclosure or loss is likely to result in serious harm to any of the individuals to whom the information relates".
The notification regime created by the legislation will cover most Australian government agencies, businesses with an annual turnover in excess of $3 million, and some smaller organisations (such those that handle health data).
Does your small business need cyber insurance ?
Also known as 'hackers insurance', cyber insurance can protect against technology related business interruption, such as not being able to access the Internet and email, virus attacks, data loss due to viruses. Coverage for websites is also a form of cyber insurance.
As many businesses outsource web hosting and other online functions, they may be vulnerable to downtime if their technology suppliers have technical issues or go out of business.
Cyber insurance can also protect against infringement of intellectual property, online identity fraud, system suspension, theft of data, privacy protection, breach cost, cyber liability and cyber extortion.
Cyber insurance policies can be customised for both small and large businesses, the dependence of your business on technology and the level of usage of email and Internet in your business.
For cyber and privacy protection claims examples please click here.
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Further reading on cyber security and protecting your small business with cyber insurance:
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Talk to a SMART business insurance broker about AIG cyber edge or CGU Cyber defence to see if they are suitable and affordable for your business.
- Losses to your business
- Loss to others
- Cyber Event response costs
- Contingent business interruption
What may be covered
- Costs and revenue replacement cover Sums payable, inc. regulatory fines, penalties, and defence costs
- Costs incurred through event response and management services
- Costs and revenue replacement if external supplier suffers a Cyber Event
- Business interruption
- Cyber investigation expenses
- Breach of privacy laws
- Fines and penalties
- Credit and identity monitoring
- Customer notification costs
- Data restoration and securing costs
- Cyber extortion costs
- Virus extraction
- Business interruption