From your local café to huge multinational companies, more businesses are moving their operations online and most businesses are using online systems to manage their business. But with all the good technology does for businesses, it’s not without its perils.
In just a three-month period in 2019 (July to September), nearly 150 incidents of cybercrime were reported to the Australian Cyber Security Centre (ACSC) every day.1
If your business relies heavily on the online world to run, the last thing you need is some malware or denial-of-service attack interrupting your operations and revenue stream.
This is where cyber liability insurance can help. We’ll take you through the ins and outs of cyber liability insurance and why it’s something you should consider for your business.
Cybercrime can include offences:
Let’s use an example of a cybercrime. A medical clinic receives an email that appears legitimate but contains a suspicious link. When accidentally clicked by an employee, the link installs malware on the clinic’s systems and compromises patient data.
A cyber liability insurance policy could assist the clinic to deal with compromised computer system and may even make a payment to the clinic for the interruption to its business.
Cyber liability insurance is designed to protect your business when things go wrong on the virtual end of operations. This can include data breaches that result in legal claims made against you, system downtime causing an interruption to your business’ finances and cybercrime.
Coverage is generally split into two categories, first-party and third-party. This means that a cyber liability insurance policy can cover cyber incidents which cause damage to your business (the first-party) as well as those that affect your customers (the third-party).
As with most types of insurance, the inclusions of cyber liability insurance can differ between providers and policies. However, you can generally obtain cover for:
Of course, insurance can’t cover every scenario. Again, coverage will vary across providers but some standard exclusions in cyber liability insurance policies include:
Cyber liability insurance can be as important as any business insurance, as cybercrime becomes more prevalent in a world that continuously moves online.
In fact, in just three months (July to September 2019), the ACSC received more than 13,000 reports of cybercrime. This amounted to approximately one report every 10 minutes during that period.1 Cybercrime is costing Australians more than one billion dollars each year, with small businesses the victims in 43% of these cases.3
What’s more, in another sobering story for small Australian businesses, 22% of small businesses reported being affected so severely by ransomware attacks that they were forced to cease operations in 2017.4 In the same study, a staggering 87% of small businesses said they believed they were safe from cybercrime simply because they use antivirus software.4 While it’s true that antivirus software is vital to protecting your business from cybercrime, cyber liability insurance is also an essential component.
The cost of cyber liability insurance is different for each business because premiums are calculated using factors that are often unique to your company. Some things that might affect how much you pay for cyber liability insurance include:
Your policy premiums will also be affected by which provider you choose.
If you’d like an idea of how much your business could potentially pay for cyber liability insurance, you can complete a free quote through our business insurance comparison service.
While not required by law, cyber liability insurance should be considered by any business that wants to protect their operations and customers. Cyber threats are continually evolving and becoming more frequent and one attack could have the potential to bring your whole business to a standstill.
If you’re unsure whether your business needs cyber liability insurance, perhaps ask yourself a couple of questions:
In short, any business that operates to some degree in the cyber world should consider cyber liability insurance. From small local businesses whose only online presence is their website to large multi-million-dollar companies that store data from thousands of customers, they could all potentially benefit from cyber liability insurance.
However, there are few industries where cyber liability insurance should be viewed as important, including:
Comparing cyber liability insurance needn’t be difficult. In fact, you can do it in three easy steps!
1 Australian Cyber Security Centre – Cybercrime in Australia: July to September 2019. Published December 2019. Accessed April 2020.
2 Australian Federal Police – Cyber crime. Accessed April 2020.
3 © Commonwealth of Australia (Australian Small Business and Family Enterprise Ombudsman) 2017 and 2018 – Small Business Cyber Security Best Practice Guide. Accessed April 2020.
4 Australian Small Business and Family Enterprise Ombudsman – Cyber Security: The Small Business Best Practice Guide. Published 2017. Accessed April 2020.