The Australian Government estimates almost 700,000 businesses have experienced a cyber crime, 60% of which targeted small to medium size businesses with the average cost in excess of $275,000.
Most small businesses are increasingly reliant on IT. Many handle sensitive information. All it takes is one accidental click on one dubious email by one employee to expose your business and the personal data you hold on clients. This constitutes a confidentiality breach, according to The Australian Privacy Principles, and could incur fines up to $1.7m.
Businesses and individuals are all subject to a variety of risks such as viruses, spam, phishing, worms, hacking etc. To counter these threats, you’re probably already employing a number of add-ons such as antivirus and anti-spam software, firewalls and intrusion detection systems to reduce the likelihood of being attacked.
Despite these risk protection techniques, data breaches still occur. We regularly read about businesses that we expect to have impenetrable security having data breaches, such as Kmart, Ashley Madison and Linkedin. The Linkedin security breach is now thought to have affected approximately 117 million people. No matter what size your company and whatever measures you take, hacking is a risk. Cyber specialists are continually developing their techniques to stay ahead of the game with “zero days” – vulnerabilities that were previously unknown, such as in the recent hacking of iphone, occurring from time to time.
It is often assumed that business/general liability insurance policies include cyber insurance as standard, but this is not the case. It’s worth having an insurance broker review your policy to be certain that you’re covered for cyber-attacks and if not, they can advise you about the most appropriate cover for your business.
First party coverage insures the losses to your business directly resulting from a cyber-attack and can include but is not limited to system damage,lost or destroyed data, cost of retrieving or replacing data, external legal, IT and security forensic costs and loss of profits.
Third party coverage insures the losses sustained to third parties, your clients, and can include the cost of credit or identity theft monitoring, data restoration and legal costs; the liability costs associated with the breach of privacy; protection against libel, slander or defamation and the public relations costs to protect the brand and reputation of executives.
Peter Vickers,Chartered Accountant and Tax Specialist based on the North Shore, added insurance broking services to his business group 20 years ago to help clients protect their assets.