- Oct 04, 2016
- 6 min read
We are always looking to innovate and upgrade what we do as insurance brokers and to improve the services and value we provide for our clients.
The interesting fact is however that a lot of the basics of the general insurance business – certainly the styles of cover we are accustomed to – and indeed the types of risk that apply to businesses have been around for centuries. The matter of Cyber Crime however is something that many businesses are still not really addressing as well as they can or indeed should.
In early March 2014, a number of amendments were made to the Privacy Act of 1988. These were designed to reinforce the Act and force organisations that collect or deal with personal information to take the security of this information more seriously.
This was done as a direct response to the global surge in cyber crime.
Think about your own increasing reliance on email, software, data storage – both locally and in the cloud – web based commerce and digital media activity and the impact of a cyber crime event..
Think about your own increasing reliance on email, software, data storage – both locally and in the cloud – web based commerce and digital media activity and the impact of a cyber crime event such as server hack or sabotage or theft of information. How would you respond? Would you be able to survive the loss of data, productivity or disgruntled clients?
Cyber Crime has existed in one form or another since computers became popular in business, however a business owner’s ability to insure this risk has not been readily available, until recently.
You see now it’s becoming more of a problem than ever. In 2015 – according to the Symantec Internet Security Threat Report 2016 – ransomware increased by 35%, and more than 1,000,000 web attacks were made against people every day of that year.
While we often think of this as more of a problem for big business, 43% of all corporate attacks were against businesses with between 1 and 250 employees..
This means that small business is well and truly in the sights of cyber criminals. This is big business for them and their methods are working.
Unfortunately regardless of your IT security, more than 80% of hacking events are in some part due to human error. This can include;
- Loss or theft of a lap-top
- Opening an infected email or attachment
- Browsing public websites on work computers that may expose the network to malware or madware
- Poor personal security – this can involve having generic passwords, or public passwords
If you are in business – irrespective of your size – you will be hacked. Retailers, professional services, agribusiness and manufacturers are all targets.
Now for the good news.
A number of underwriters now offer cover for these risks, and depending on the policy, a business owner can get cover for a range of risks including;
- Data and software restoration costs
- Cover for lost revenue and downtime
- Forensic investigation costs
- Costs for notifying those affected by a suspected data breach event
- Credit monitoring services for those affected by such an event
- Cost of extortion and ransom demands
- Civil penalties and compensation levied by regulators
- Liability arising from online content, transmission of viruses etc.
Over Half a Billion Personal Records Were Stolen or Lost in 2015. The notification and monitoring costs can be in excess of $100 per record. The cost to a business with more than 1,000 client records would be disastrous.
A significant cyber crime event could potentially cost hundreds of thousands of dollars. With the addition of forensic investigation costs of $50-$100K and potential fines and penalties even a robust business can be mortally wounded.
If your business uses customer information, has a website or webshop, or communicated to clients on email, you are exposed to cyber risk, and you need to understand and manage that risk.
The point here is that to effectively manage a risk that business is only just coming to terms with, you need to speak to someone who can steer you in the right direction. If that’s the case for you then please email us on email@example.com or call us on 07 3252 5254 and talk to one of our brokers.