$4.5 billion per year – the cost of cyber crime in Australia (AON):
and data breaches are costing an average of $2.16m. It seems surprising that so many organisations do not have a clear understanding of their exposure to cyber fraud and the impact it can have on their company.
The growth in technology has created new vulnerabilities and new targets for cyber fraud. As communications are increasingly taking place in the cloud, using apps and social media, and with the advent of fully hosted cloud based systems, the risk factors are heightened and companies thanks to changes last year to the Australian Privacy Act have an increased obligation to protect the data they hold on clients and prospects.
Further risks emerge around the use of networks used to facilitate better business practices. It is often necessary to store and use client data which is accessible to a range of personnel in an organisation. It is this data which needs to be stored securely.
It is often wrongly assumed that breaches to data security are covered by a general liability insurance policy. Such policies usually do not cover intangible assets and are most unlikely to cover the huge costs to a business of cyber fraud.
It is important for all businesses to check their insurance cover so that if they become the next victim of cyber fraud that we read about, they are able to recover the costs, limit liability and the damage to themselves and to their clients with a comprehensive cyber insurance policy.