cyber insurance Australia
Insurance is incredibly important. In addition to giving you peace of mind that you’re protected should something go wrong with your cyber systems, it can also save you a lot of money if you did need to make a claim because your security was compromised. Business owners may take for granted that they have robust security systems in place but things can change in an instant so it’s better to be safe than sorry. Insurance typically costs only a couple of thousand dollars each year, depending on the cover that you’ve decided to take up. A more comprehensive policy will cost more than one that only covers you for a couple of things. If you’ve never thought of cyber insurance before then you may not be aware of the types of things it covers you for, so we’ve decided to help you out by giving you information about what cyber insurance policies cover below.
The first thing to consider before you take out a cyber insurance policy is what the purpose is. Do you just want a bear minimum policy or do you want a policy that covers you for absolutely everything imaginable? If it’s the former then the policy will be cheaper than if you want to be covered for everything whereas if you want to be covered for everything then you can expect to pay more. Both have their advantages and the one that you decide to go with will depend on the risks to your business and if your business can afford to be compromised. Think of it this way, if you’re running an international ecommerce operation then the risks will be so much greater and your products will be sold between jurisdictions so the more comprehensive your policy is, the better it will be for you. If on the other hand you just a small hobby business and only sell locally in Australia then the bear minimum will be okay. It also depends on the traffic to your website and where that traffic originates. If you have a lot of visitors to your site then the chances of it being compromised are that much greater. The geographical location of your customers also determines the risk. If the visitors are overseas then you may not legally be protected from cyber attacks. It is always harder to prosecute international cyber attacks due to differences in legislation between nations.
You also need to consider what your current vs your future needs will be. Is your business going to downsize or do you have plans to scale upwards? If you plan to downsize then you can probably afford to have a basic cyber insurance policy. If you plan to expand your business then you will need a more comprehensive policy so that any possible holes in your security system are protected. Larger companies also have a bigger budget so even if they’re not covered they can afford to pay compensation when there has been a breach. Smaller companies don’t often have that luxury because a lot of small businesses have very little cash reserves. The right cyber insurance policy will give you confidence that you are covered in the worst case scenario after your cyber network systems are threatened.
So you’re probably wondering what exactly cyber security insurance covers. Some of the areas that are covered are listed below:
- Privacy & Security Liability;
- Interruption to your business including downtime;
- Data Recovery;
- System Damage;
- Regulation compliance costs;
- Loss of reputation.
Occasionally a business’s privacy and security settings will be compromised and the information that clients have supplied will be at risk. Not only will the data be in the hands of an individual or individuals who may use it for malicious purposes, you will also need to upgrade your security settings and that can cost substantial money. A good cyber insurance policy will cover these situations and you will be protected in the event that your clients’ information is threatened. You will also need to go into damage control which could mean hiring a PR firm to manage your reputation, which also costs money. That could potentially bankrupt your business unless you have cyber insurance in which case you will be protected in these situations.
When you run a ecommerce business extortion is unlikely however it could happen so it’s worth protecting yourself. Extortion is when you are coerced into handing over money or information and cyber criminals are getting more and more savvy as the years go by. Although you may think it couldn’t happen it could and it would be very costly so it’s not worth taking the risk. Get a cyber insurance policy that protects you from it.
Interruption to your business would be costly. Some businesses lose thousands, if not hundreds of thousands of dollars each day if their business is interrupted and if there is a cyber attack then your business may be out of action for a day, a few days or even a few weeks. Aside from the immediate cost you could also lose potential customers who will be forced to go to your competitors. A cyber insurance policy will protect you from any interruption to your business and you’ll be able to run your business with maximum productivity.
When you lose your customer data then your relationship with your customers will be threatened. In addition to the immediate risk that the data will be used for malicious purposes, you could lose your business reputation. Reputation is everything in business these days and risking your business reputation is not worth it. It’s best to spend a few dollars each month protecting your business.
Compliance costs are an expense that business owners hate to pay. They can cost a lot to integrate and can take time away from the things you would rather be doing, but with the right cyber insurance policy you are covered. Urban Digital Services can help recommend the best cyber insurance providers.