Cyber Insurance: Fad or Fact?

By Peter Vickers Insurance Brokers | Cyber Security, Insurance, News Highlights |

With the constant development of new technology there seems to be an ever growing list of digital trends – some that are brilliant and others that flop. As cyber crime appears to be relatively new and just another ‘trend’ to hit the papers it could be perceived that cyber insurance is just a load of hot air.

Many SMEs believe that they are ‘too small’ to be considered by cyber criminals – why choose an SME when criminals could target big players such as Facebook and Amazon? However the reality is frighteningly different. According to Chubb’s latest market report, 60% of Australian SMEs fell victim to a cyber attack in 2018 alone. Smaller companies often face more exposure to cyber criminals – with less sophisticated IT systems, less budget and the inability to properly train their staff to spot an attack, such as a phishing email.

What challenges do SMEs face with keeping their IT systems secure

Credit: 2017 State of Cybersecurity in Small & Medium-Sized Businesses (SMB), Ponemon Institute

Cyber security risks are increasingly important to businesses, a Ponemon Institute report revealed that 75% of businesses rank cyber risks greater or equal to ‘traditional’ business risks such as a natural disaster, business interruption or a fire. SMEs must also consider that the costs of a cyber attack can be huge not only to the bottom line but can be detrimental to brand and reputation. Despite these worrying statistics 62% of Australian SMEs have not purchased cyber before – perhaps it’s time to reduce this figure.

Types of cyber crime SMEs have experienced

Credit: Too Small to Fail? Chubb's Australia SME Cyber Preparedness Report

What can cyber insurance cover?

While you can’t always prevent a cyber attack, you can be protected against one. A cyber insurance policy can cover you for expenses related to the following:

Interrupted business
Hiring negotiators and paying a ransom
Recovering or replacing records or data
Liability and loss of third-party data
Defence of legal claims
Copyright infringement
Misuse of intellectual property online
Crisis management and monitoring
Prevention of further attacks

It is important to remember that your business liability insurance doesn’t cover you for a cyber attack or data breach.

How we can help

Our insurance brokers currently work with several underwriters who offer cyber insurance products to ensure we remain ahead of this evolving threat and are able to offer the best protection possible to our clients. We aim to bring you the best policy that supplements your current business insurance. For further information you can read about our full cyber protection brochure here. Alternatively, to talk to one of our experts you can email us using the button below.

TALK TO ONE OF OUR EXPERTS

To understand more about cyber insurance cover for your business you can learn more here: “The top 5 reasons SMEs should be considering cyber insurance”.

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