Expenses related to cyber extortion or terrorism such as theft of hardware, destruction of data stored on any computer system or theft of access codes from premises, computer system or by employees.
Cyber Insurance
The world today is governed by data and online connectivity. The internet enables so much for businesses and the lives of consumers, yet it also creates a huge cyber security exposure to the data-rich systems we rely on to operate.
Cyber Liability Insurance can help protect your business from the raft of serious liability and reputational exposures that can occur as a result of a cyber-attack.
Regardless of how good your company IT systems are, there is no 100% guaranteed way to protect your data. A data breach will not only affect your business, it can negatively impact your clients and customers.
Stolen credit card numbers, financial reports, medical records, birth dates and the loss of sensitive personal data can leave you liable and exposed, causing enormous damage to your bottom line and reputation. Recent changes to the Privacy Act now place even greater onus on Australian businesses to secure the sensitive data they hold, with hefty fines and penalties in place for privacy act breaches.
Traditional insurance policies do not cover losses to your business as a result of a cyber attack. This makes Cyber Insurance essential for all businesses.
Key benefits:
- Financial compensation to recoup costs that result from a security breach – including business interruption, IT recovery costs and regulatory fines – which can amount to $2.1 million.
- Compensation for clients and customers who suffer financially or emotionally as a result of stolen data.
- Extends to include expenses for legal representation and costs that incorporate forensic and legal counsel.
- Covers the cost of professional consultants to assist in repairing damage to your company’s brand and reputation.
There are a wide range of suitable covers available for both small-medium enterprises and large organisations.
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Please Note: Below are some of the more common insurance policy features, however, the list is not exhaustive and some features may not be offered by certain insurers. Please refer to the insurer-specific policy wording for inclusions, exclusions, terms and conditions.
Covered Features
Data Security
Privacy Breach
Costs associated with a privacy breach including consumer notification and costs of providing credit monitoring services to affected customers.
Reputational Repair
Reimbursement of costs incurred in relation to reputational damage, libel, slander, defamation and invasion of privacy.
Network Interruption
Cover for net income that would have been earned and continuing normal operating expenses incurred including payroll as a result of security failure.
Fines and Penalties
Costs incurred due to fines or penalties imposed by government or regulatory authorities for a breach of data protection laws.
Defence Costs
Costs for legal advice and representation in connection with formal investigations by authorities.
FAQ's:
If your company transacts online or stores data electronically, you are vulnerable to a cyber attack.
These types of policies do not extend to cover the evolving threat of cyber liability. Even though a cyber attack can effectively shut down your company, your business insurance will not respond as there has been no physical loss to a tangible asset. In most instances your liability insurance will not respond as most liability policies include an electronic data exclusion.
As of March 2014, new privacy laws will hold your company accountable for the security of your client’s data. A breach of privacy can result in your clients seeking
compensation for emotional distress and future harm. You can also be required to provide ongoing credit monitoring services to your affected customers.
You should not rely solely upon your firewall to protect your business. If the data security of the Australian government and large multinational companies can be hacked, then it’s highly likely that your IT firewall could be hacked too.
Directors and Officers need to ensure that all levels of the company understand the importance of securing your clients’ data, implications of losing company data and how as a company you will respond in such an event.
A cyber liability insurance policy should be part of your company’s risk management strategy.
