Cyber Liability Insurance: The Ultimate Guide For Businesses
Cyber Liability Insurance. What is it and why is it important?
As we move towards an increasingly digital world, our dependence upon technology is growing. Most businesses now conduct a majority of their activities online whether that be banking, online stores, customer databases and much more. As a result, the prevalence of cyber crime has increased both in frequency and sophistication.
What does that mean for business owners?
To place it simply, cyber security must now be considered a priority for your business. Without having the correct security systems and risk management strategies in place, you may be leaving your business and it’s sensitive data exposed to cyber threats.
According to The Australian Cyber Security Centre (ACSC) 2016 Threat Report, between July 2015 and June 2016, Australia’s national Computer Emergency Response Team (CERT Australia) responded to 14,804 Cyber Security incidents affecting Australian Businesses.
- Of these incidents, 418 affected systems of a national interest and critical infrastructure. This resulted in ACORN reporting over one billion dollars of self reported losses for these businesses.
- The Symantec 2016 Norton Report found that globally, 689 million people experienced some form of cyber crime.
- Since 2015, Cybercrime victims have spent $126 Billion dollars and on average 19.7 hours dealing with the fall out.
Whilst Australia sits at the lower end of the scale when it comes to Data Breaches according to the 2016 Ponemon Institute Report, it still shows that on average, when a data breach occurs in Australia, 19,663 client records are compromised.
The average cost of a breached record in 2016 was $2.44. This means the average breach cost works out to be a staggering $47,977.72.
These staggering statistics indicate how important it is for businesses to act sooner rather than later in ensuring their business has cyber security measures in place.
All businesses large and small, as part of their risk management strategy, need to consider a Cyber Liability Insurance policy.
Cyber Liability Insurance is considered by many as a new player in the game. Businesses therefore have little knowledge about the product and the benefits it may provide in the event of a cyber attack. Many other small and large businesses simply adopt the mindset that ‘it won’t happen to them’ through a combination of perhaps outdated thinking, and lack of awareness of this global issue.
This guide has been developed as your one-stop-shop in learning about Cyber Liability Insurance and how it can work to protect you in our current and future digital environment.
Chapter 1 – What is Cyber Liability Insurance?
More now than ever, we are seeing the increasing number of cyber attacks that have targeted both local and international businesses of all sizes. The impact of falling victim to a cyber attack can be devastating for businesses, particularly those who do not have the financial capacity to recover from such an incident.
Introducing Cyber Liability Insurance Cover. This particular type of cover can be tailored to meet your unique cyber, privacy and media requirements. In the unfortunate event your system is hacked, having the correct cyber cover will assist you and your business to respond to the incident and get back up on your feet again. Without such a cover, the damage bill to both your reputation and finances can be devastating.
If you are looking to learn more about Cyber Liability Insurance, this video will help to outline the basics and get you up to speed on what is available
Chapter 2 – How Cyber Liability Insurance Will Help Protect Your Business
A common misconception among business owners is that cyber attacks are targeted toward larger corporations. To a cyber hacker, all of your business data is valuable whether that be customer names, contact details, employee details or even health records.
Therefore small businesses also become targets as well as individuals, not just large businesses with vast databases.
In the event your business is targeted by a cyber attack, it is more than likely you will not be covered under your standard business insurance. Cyber Liability Insurance cover is specifically designed to assist your business in recovering from a cyber event where other policies will not provide you cover.
Another added benefit of going through the process of arranging your cyber liability insurance policy is that it encourages you to address your cyber security and risk management processes, and identify existing vulnerabilities which you may not have done otherwise.
Browse over these articles which discuss just why it is important to consider a Cyber Liability Insurance Policy for your business.
Chapter 3 – What Cyber Threats Are Out There?
The internet can be a shady place. We have already witnessed a number of high profile and significantly damaging cyber attacks upon businesses around the world. Some of the highest profile incidents include:
We could go on all day with all the companies that have been hacked. Check out this page showing all the biggest hacks going back to 2004.
Closer to home, some of the biggest names in business have been been affected including:
There was also the Census ‘attack’ in 2016 that made headlines.
Each of these events showed the different threats that are out there for all businesses. Yes, they happened to some of the biggest companies in the world, however it doesn’t matter the size of your business as everyone can be affected.
Think that these businesses spend millions of dollars to protect their businesses and they still got affected. If your spending very little to protect your business, what sort of protection do you have in place?
These articles give a great overview of the types of threats that we are currently aware of, and the impact they can have upon businesses and individuals.
Chapter 4 – Safeguarding Your Business
Most business spend a great deal of time and resources focusing on maximising profit or tailoring a marketing strategy, but what about your risk management strategies?
In today’s global market, all businesses should incorporate information and network security into their overall risk management strategy to ensure the success of their business.
With the complexity and frequency of cyber attacks increasing, having safeguards in place to protect your intellectual property and financial information is paramount.
Don’t make it easy for hackers to compromise your network! Following the advice given in these articles, you can make sure your business is prepared and protected as best possible to avoid your systems being breached.
Chapter 5 – Recovering From A Cyber Incident
Having all of the correct measures in place to ensure your networks and systems are secure is the first step in preventing your business from being vulnerable to a cyber attack.
Even with the most stringent measures in place however, there is no guarantee that your business won’t fall victim to a successful attack. A recent study by IBM identified that 66% of organisations would not be able to recover from a cyber attack.
One of the biggest errors businesses can make is not having an incident response plan to adequately handle the aftermath of a cyber attack.
This can often lead to further damage occurring by employees trying to assess or fix the damage done by the hackers themselves while destroying data and evidence in the process.
Alternatively, not adequately notifying customers and the authorities of the attack, can lead to irreparable damages to the reputation of your business.
It may take a small amount of your time, but implementing an incident response plan could actually mean the difference between your business landing on it’s feet after an attack, or collapsing.
These resources will provide you with some pointers to have you well on your way to developing a response plan for your business.
Chapter 6 – Cyber Attack Case Studies
By now, you will have a solid idea of how common and damaging cyber attacks can be, and what you can do to prepare and protect your business from any potential threats.
This chapter, we will take a look at some of the most relatable Cyber Insurance claims that have occurred recently from the different insurers.
Chapter 7 – Protect Yourself Personally Against Cyber Crime
Throughout this guide, we have thoroughly explored cyber threats and the impact an attack can have on your business, but what about your personal data?
As our reliance upon technology and the internet increases in our everyday lives, so too does the prevalence and sophistication of cyber criminals.
Most of us now possess a smartphone, tablet, computer or laptop and use this technology to connect on social media, shop online or do our banking – the list is endless.
Now more than ever, we are willing to share our sensitive personal information online such as our names, addresses and credit card details, placing us at a high risk to become vulnerable to a cyber attack.
The good news is that there are a number of ways in which you can ensure that your personal information remains as secure as possible online to eliminate the possibility of your details falling into the wrong hands.