In a joint study with Cambridge University, Lloyd's insurance company has found that out of 301 global cities, Sydney ranks 12th in terms cyber-attack exposure with $4.86 billion of economic growth at risk. ‘Cyber attack’ is a term that is frequently used by media, academics and foreign governments to describe the gamut of malicious activity against a computer network or system. Business owners need to be aware of new risk impacting organisations globally due to the advancement of technology.
The following article displays common types of cyber-attacks, clarifies the coverage of cyber risk insurance and highlights the benefits of purchasing cyber risk insurance.
Software used to disrupt computer or mobile operations and to gather sensitive information from computers systems or display unwanted advertising.
The attempt to obtain sensitive information such as usernames, passwords, and credit card details often for malicious reasons. It can be via clicking a link in an email, clicking on banner ads or pop-ups, downloading of a plugin or a program not knowing it’s a virus/attack.
Denial of Service Attacks
Websites and systems accessed and controlled remotely. With programs like Cryptolocker and TorrentLocker. They do more than just lock a screen , they search for files by extension (e.g., pdf, doc) and encrypt them, withholding the encryption key until a ransom is paid.
Security companies like Kaspersky, Malwarebytes, Cisco, Norton, and TrendMicro are developing tools to combat popular types of ransomware. These tools are free and can be deployed via USB.
Cyber & Privacy Protection Insurance – What it Covers
There are a couple of different options available. The most comprehensive coverage is available by individual policies that are designed to commonly cover:
First Party Claims
The cover includes your own costs associated with credit monitoring, cyber extortion, data restoration, forensic consultant, breach notifications, public relations and legal representation expenses.
Business Interruption Claims
Covers claims arising from reimbursement for lost profits and necessary expenses incurred to maintain business operations.
Third party claims
Covers costs relating to claims for compensation, investigations, fines and penalties (new privacy act), defence costs and legal representation expenses.
Covers the Insured's direct financial loss and legal liability to third parties arising from social engineering fraud, spoofing, phishing, phreaking and cyber fraud.
Benefits of First Response to Claims
In the event of a breach, most businesses will need help to unravel the impact and may also need help if their business is closed while this happens.
Most policies have a 24/7 hotline to report matters to obtain immediate advice and support. They have IT forensic and legal advisers experienced in these matters ready to deploy to assist in the resolution of these matters quickly.
Premiums for individual covers start from around $700 - $1000 plus applicable charges depending on the level of cover and policy benefits. There are options with some insurers to have extensions included under other policies, such as under Management Liability and Professional Indemnity Insurance, premiums are generally around $200.00 plus charges however they provide very limited benefits and exclude business interruption. To have comprehensive cover an individual policy is your best option.
If you have uncertainties about protecting your business from data breaches and cyber-attacks, you can read about the benefits of purchasing Cyber Liability Insurance and also here are some practical tips to help prevent cyber breaches.
Disclaimer – “This material contains general information only and may not suit your particular circumstances. To decide if a policy is right for you please carefully read the relevant Product Disclosure Statement (PDS) and/or Policy wording. While we have exercised due care and skill in preparing this information, Optimum Insurance Services (Optimum) does not accept any legal responsibility or liability for negligence or otherwise to you or anyone else who seeks to rely on this information. This includes, without limitation, loss arising from a possible failure of the information to comply with statutory or regulatory requirements or the failure of the information to identify other terms and conditions beyond those considered in this document. You should obtain advice to ensure that your policy provides adequate cover for your circumstances.
“Optimum Insurance Services Pty Ltd is a Corporate Authorised Representative of Insurance Advisernet Australia Pty Ltd (Car No. 291220), Australian Financial Services Licence No 240549, ABN 15 003 886 687.”