Cyber Insurance – Update

General Insurance

By Craig Anderson

Well-known law firm Slater and Gordon have reportedly lodged a class action against Optus, on behalf of more than 100,000 registered participants alleging their safety has been compromised.1 Data allegedly accesed by hackers may include name, date of birth, email, phone number, address, and ID numbers such as driver’s license or passport numbers. If this can happen to a multi-million dollar global communications giant with a full time IT department, then it can happen to your company.

This news should send a shiver down the spine of all small and medium enterprises as well, because similar data breaches experienced by small businesses put up to half of them out of business within 6 months.2 Reputational damage and associated lack of trust is certainly a revenue killer, even if the horrendous cost of rectifying a breach isn’t enough to bankrupt the business first. Fines and penalties will sometimes be a problem too, and there are potential EU General Data Protection Regulation fines, which may apply within Australia if the affected party is from an EU country.3 a. Business interruption financial loss due to a network security failure or attack, human errors, or programming errors b. Cost of data loss and restoration including decontamination and recovery of files and hardware c. Emergency incident response and investigation costs, supported by an insurer appointed contractor d. Delay, disruption, and acceleration costs from business interruption event that stems from a cyber-related issue e. Crisis communications with clients and reputational damage mitigation expenses f. Civil Liability costs arising from failure to maintain confidentiality of data g. Civil Liability arising from unauthorised use of your network h. Computer/data network, or data extortion / blackmail (where insurable. Paying this may be illegal under certain circumstances) i. Online media civil liability j. Regulatory investigations expenses

So what might a Cyber Policy typically cover?

As diligent as you may be at managing your clients’ data, system intrusions can still happen.

Given that cyber-crime profits have eclipsed the global drug trade in turnover, I would say it’s a pretty fair assumption that the SME sector will take a beating sooner rather than later. Talk to your broker about Cyber Insurance today, and protect yourself and your clients against extensive losses.

If you think you may be affected by the recent Optus Data Breach go to https://www.acma.gov.au/optus-databreach or ring 133 937

1. https://www.abc.net.au/news/202304-21/optus-hack-class-actioncustomer-privacy-breach-dataleaked/102247638

2. https://www.mybusiness.com.au/ resources/news/more-than-half-ofsmall-businesses-close-after-a-cyberattack

3. https://ovic.vic.gov.au/privacy/ resources-for-organisations/eugeneral-data-protection-regulation/

See Scope of the GDPR: Considerations for Victoria

For a health check of your business insurance, contact Small Business Insurance Brokers via email sales@ smallbusinessinsurancebrokers.com.au

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