Does Your Business Really Need Cyber Insurance?

Statistics show that around 40% of the population have been victims of one or more data breaches having their sensitive information stolen. The recent Optus security breach is possibly the worst data breach in Australia’s history. Followed by the cyber attack on Uber’s internal systems, cybercrime is at at an all-time high and is a major concern for all businesses.

After all, if it can happen to big name companies like Optus and Uber, it can happen to anyone. So, it begs the question, what can you do to protect your business from cyber-attacks?

You may have considered Cyber Insurance. In the unfortunate event that your company or organisation is the victim of a cyber-attack, having Cyber Insurance is one of the best ways for you to cover your business. Though, while many people perceive Cyber Insurance to be a set-and-forget means of protection, it’s not quite that simple.

In this article, we discuss what Cyber Insurance is and why it is more important than ever for businesses to have a comprehensive cyber risk management strategy in place.

• What is Cyber Insurance?
• Do Small-to-medium businesses really need Cyber Insurance?
• The Importance of Having a Cyber Risk Management Strategy
• How to Protect Your Business from Cyber Attacks

What is Cyber Insurance?

Much like house or car insurance, Cyber Insurance is a policy that is designed to cover your business’ liability in the case of a data breach. Depending on the level of coverage, Cyber Insurance can cover the costs associated with data breaches and cyber-attacks such as notifying customers, lost income, repairing damaged computer systems and recovering compromised data. If the worst was to happen, Cyber Insurance may be the saving grace for a business to recover its losses and get back to normal as quickly as possible.

Do Small-to-Medium Businesses Really Need Cyber Insurance?

With all the recent attacks against big name companies, you may be wondering, as a small or medium sized business, do you really need Cyber Insurance?

The simple answer is yes.

Cyber insurance is not just for large enterprises. In fact, as many small or medium size businesses don’t have the same resources dedicated to cyber security as larger companies, they are often seen as more vulnerable and easy targets for cyber criminals. So, it’s important for all businesses, regardless of size, to prioritise cyber security and have an insurance policy in place.

Any business that stores sensitive data such as customer names and addresses or financial information such as credit card details should consider Cyber Insurance.

Imagine you’re running a small medical practice and you are the victim of a security breach. A cybercriminal has managed to break through your firewalls and has stolen your staff and customer’s sensitive information. All personal data such as first and last names, email addresses, phone numbers, home addresses and Medicare details are now on the dark web. What do you do next? Do you know what you are liable for or just how much this breach will cost your business?

A cyber-attack can do more damage than just stealing information. With high costs due to disruption of the business, reputational damage and costly potential lawsuits from losing customer’s data, the financial loss can be devastating to any business. That’s where Cyber Insurance can help to protect your business.

The Importance of Having a Cyber Risk Management Strategy

You may think that once you have Cyber Insurance that alone will take care of your business, but that’s not the case. Cyber Insurance is just one part of a business’ cyber security arsenal. To effectively protect your business and minimise the risk from a cyber-attack, it’s essential to have a comprehensive Cyber Risk Management Strategy that is regularly maintained and updated. This strategy is intended to strengthen user cyber awareness, reduce risk and protect your data and systems.

Do you know what to do in the case of a security breach? Do you know what to look for to prevent a cyber-attack?

These are key questions that every business owner and employee should be able to answer immediately with a clear and thorough cyber risk management strategy in place.

If you not sure where to start, the Australian Cyber Security Centre’s (ACSC) Essential Eight Maturity Model provides a basis to build your cyber risk strategy for most industries. In fact, many Cyber Insurance companies are now refusing to insure customers if they don’t have a strategy in place like the Essential Eight Maturity Model. Even if a business already has Cyber Insurance, they must also prove that they have done and maintained all the necessary cyber security steps to prevent a security breach, or risk having a claim rejected.

Depending on the amount of sensitive information, each industry will have different requirements and it’s important for business owners to be aware of their security obligations. For instance, medical or financial industries may require a higher level of cyber security than a local corner store as they store more sensitive information.

What more should be done?

Cyber Insurance is a great way to protect your business in the case of a cyber-attack but there is much more to be done to prevent cyber-attacks. It’s more important than ever for businesses to understand the importance cyber security plays in their daily processes and implement a thorough Cyber Risk Management Strategy to mitigate cyber risk.

As each business is different, it can be difficult to know what security requirements your business may have. The team at Future IT Services are experts in cyber security and are here to help. Talk to us today to discuss what options are available for your business and to ensure you have the best level of protection against cyber threats.