What Are The Benefit Of Cyber Stand-alone Policy vs A Cyber Risk Extension?

A stand alone cyber insurance policy is far more comprehensive than an extension of cover offered under another policy which is commonly available under management liability or professional indemnity insurance.

It covers a broad range of cyber risks and is designed to help an organisation mitigate risk exposure by offsetting costs involved with recovery after a cyber-related security breach or similar event.

Due to the cyber exposure, some insurers now are no longer offering the extension under these policy due to the limited cover that is provided.

Key elements of cover provided by Cyber stand-alone policy

First Party Costs

Reimburses the Insured for the costs they would incur to respond to a breach, such as IT Forensic Costs, data restoration, Credit Monitoring Costs, Public Relations Expenses and Cyber Extortion Costs (including ransom payments to hackers).

Business Interruption

This section provides reimbursement for the Insured’s loss of profits resulting from the breach, as well as any additional necessary expenses it may need to incur to continue business as usual.

Third Party Claims

Covers the Insured’s liability to third parties from a failure to keep data secure, such as claims for compensation by third parties, investigations, defence costs and fines and penalties from breaching the Privacy Act.

Social Engineering

Covers the Insured’s direct financial loss and legal liability to third parties arising from social engineering fraud, spoofing, phishing, phreaking and cyber fraud.

Cover provided by Cyber Risk of Extension

Breach of Privacy

Third party claims for a breach of confidential information and infringement of your customers’ right to privacy. However does not cover potential fines or penalties resulting from a breach.

Damage to your network or website

If you are hacked and your data is deleted or stolen, or if your network, system or website is damaged, the cost associated with the repair or replacement expenses is covered.

Transmission of a virus

Inadvertent transmission of a computer virus.

Third Party Liability

if you’ve mistakenly infringed someone’s copyright or published a defamatory statement on your website or in your email, including defamatory statements regarding your client or business competitor, we will indemnity you against the sums you have to pay as compensations

Cyber Extortion

A hacker may threaten to damage your website in return for a ransom. We will indemnify you against the ransom paid.

Cyber Stand Alone vs Cyber Risk Extension

Every insurers cyber policy is different, with no two insurers providing the same cover. This table is provided as a guide only and you should review your policy coverage and consult your insurance broker to review your policy further.

	Cyber Stand Alone	Cyber Risks Extensions
First Party Cover	Cover the Insured’s own costs including: • Credit Monitoring Costs • Cyber Extortion Costs • Data Restoration Costs • Forensic Consultants Costs • Notification Costs • Public Relation Costs • Legal Representation Expenses	Only Covers: • Costs to restore or repair systems from a hack attack, and • Ransom payment to a hacker
Third Party Cover	Broadform policy, includes cover for third part actions for: • Compensation • Investigations • Payment of Fines and Penalties • Defence Costs • Legal Representation Expenses	Only includes limited claims for compensation Doesn’t cover fines & penalties as a result of breaching the Privacy Act
Business Interruption	• Reimbursement for lost profits, and • Necessary expenses incurred to maintain operation of the business as a result of the interruption	Not included
Jurisdiction	Worldwide	Australia & New Zealand only
Limit	Up to $2,000,000	$100,000 or $250,000 (depends on insurer)

Cyber Insurance Quotations

For more information about Cyber Risk Insurance. For a quote or advice, please contact Optimum Insurance Services directly on 1300 739 861.

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.”