5 Reasons Why Your Business Needs Cyber Insurance
An insurance policy is your safety net for when the unexpected happens.
In fact, you can now get insurance for just about anything. You can find policies covering your health, your car, your home, your business, even your pets.
So, with cyber-attacks being one of the major causes of revenue loss for businesses around the world today, it’s now critical to insure and protect your organisation against the increasing risk that using digital technology in your operations can bring.
In this article, we’ll discuss the importance of cyber insurance for your business and how it can help to mitigate the damage caused by cyber-attacks.
What is cyber insurance?
Also known as cyber liability insurance, this type of policy provides protection for businesses against the negative impacts and disruption to daily operations that a cyber-attack can cause.
Data shows that around 49% of small to medium-sized businesses in Australia have experienced a cyber-attack in the past year.
Having cyber insurance in place can help minimise the damage of a cyber incident by covering the financial cost of dealing with and recovering from the attack.
Although cyber insurance covers a broad scope, there are three key impacts that these policies protect your business from:
- Liability
- Internal financial loss
- Emergency incident response costs
A cyber insurance policy can also help alleviate some of the immediate emotional and financial stresses often caused by unforeseen cyber-attacks.
Why is cyber insurance necessary for every business?
Every business with an online presence is vulnerable to cyber-attacks or data breaches. More often than not, the consequences of a cyber incident can be extremely costly.
On top of the financial damage that a cyber-attack can cause to your business, you can also find yourself liable for data leaks involving sensitive and important information that can put your customers at risk.
Here, we’ve listed the top 5 reasons why your business needs a cyber insurance policy today:
- Cyber-attacks are the fastest growing type of crime in the world.
While many businesses have some kind of insurance policy in place, most cyber incidents are not covered by standard business insurance policies.
Cyber insurance provides comprehensive crime coverage for a wide range of data breaches and electronic incidents that are increasingly prevalent and may threaten your business’ financial resources.
- Data is one of your most important assets.
Data (such as files, folders and stored intellectual property) is now considered one of your organisation’s most valuable properties. However, most business owners don’t realise that a standard business insurance policy does not cover data that has been damaged or destroyed during a cyber-attack.
A cyber insurance policy can provide your business with coverage for data restoration and rectification in the event of a data breach, up to the full policy limits.
- Most of your staff rely on computers to get their jobs done.
Any kind of online access immediately places your organisation at risk of a data breach or cyber-attack. According to the Australian Bureau of Statistics, roughly 95% of all Australian businesses make use of the internet for business purposes.
During the 2020–21 financial year, the Australian Cyber Security Centre (ACSC) received over 67,500 cyber-crime reports, an increase of nearly 13% from the previous financial year.
If your organisation uses any internet-connected devices for work purposes, cyber insurance can protect your business from the damage and loss caused by a cyber-attack.
- Complying with breach notification laws costs time and money.
When an organisation loses sensitive personal data, they must provide written notification to the individuals who were potentially affected, or they will face hefty fines and penalties. Australia’s Notifiable Data Breaches Act makes it a legal obligation for every business to notify certain stakeholders about a breach across many territories.
Customers who have had their data compromised expect transparency from the businesses they have entrusted it with. A cyber insurance policy can provide coverage for the costs associated with providing a small or large-scale breach notice.
- Businesses of all shapes and sizes are equally at risk.
Cyber threats affect all businesses – big or small. However, most often, it is small to medium-sized businesses that are targeted by cyber criminals due to their lack of a robust IT infrastructure.
A cyber insurance policy can ensure that your business remains functional in the event of a cyber-attack or data breach.
Are there any additions to cyber insurance?
Cyber insurance establishes another layer of protection for your business, and many policies also offer premium options and extras that can be used to provide additional coverage and tailor your policy based on your needs.
This can include coverage for issues such as:
- Social Engineering & Funds Transfer Fraud
- Contingent Business Interruption
- Payment Card Data Security Liability
Are there any limitations with cyber insurance?
Even with these additional options, it’s important to understand that cyber insurance is still limited in coverage compared to the true amount of damage that a cyber-attack can cause to your business.
While having cyber insurance can help your business recover from an attack, your cybersecurity system is still your first and ultimate defence against cyber criminals and data breaches.
Prevention over cure: it’s time to strengthen your cybersecurity.
When it comes to cybersecurity, prevention is always better than cure. As your organisation grows, your network security should also evolve with it.
At Centrix, we can perform a complimentary IT Health Check to assess your business’ cybersecurity levels. We scan your organisation’s systems to evaluate how secure they are and provide recommendations about how you can ensure that you are fully protected.
Let Centrix strengthen your business’ cybersecurity.
Centrix helps small businesses all the way up to corporate organisations to succeed by managing, supporting and protecting your critical IT infrastructure.
Don’t let digital security threats stop your business in its tracks.
With our extensive knowledge and expertise, our mission is to empower your whole team with comprehensive IT Service Packages, Cybersecurity Protection and Managed Services to see you thrive in today’s digital landscape.
To start, book an IT Health Check or contact us today.