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Cyber Security Insurance is becoming increasingly more necessary for Australian businesses. These days, it would be hard to find a business that didn’t have some element of digital reliance, from as small as emails through to entire systems.
Technology has allowed businesses to grow and reach new audiences, but it’s also brought new risks that are becoming more prevalent. Businesses are now exposed to cyber attacks that can be debilitating to their business, financially and to their reputation.
Cyber Security Insurance is gaining traction for good reason. With our increasing dependence on technology, cyber crime is also on the rise and continues to evolve to be more sophisticated. Having the right coverage can help protect your business from the financial implications that often come hand in hand with a cyber attack.
In this article, we explore why cyber security insurance is now a must-have for many businesses.
We cover the following topics:
The rise of cyber attacks in Australia
Most Australians are now aware of cyber crime given the large attacks involving Optus and Medibank.
You may have been a victim of one of these attacks. The Optus data breach is reported to have impacted 40% of the population. Medibank’s data breach exposed the private information of millions of Australians.
The financial implications of these attacks were astronomical, with Optus earmarking $140 million to cover costs related to its data breach.
The 2022–2023 Cyber Threat Trends for Australian Business and Organisations states that a cyber crime is reported every 6 minutes, with a 23% increase compared to the previous financial year.
The documents also states that Australian businesses most frequently reported cybercrimes were:
email compromise
business email compromise fraud
online banking fraud
The rate of cybercrime is anticipated to only increase, leaving Australians more vulnerable to these attacks in the future.
Who is at risk of cybercrime?
To put it bluntly, everyone. Every business and every person is at risk of becoming a victim to cybercrime. It’s almost impossible now to not be online in one form or another, and this opens us to the risk of a cybercrime.
While larger companies get the media attention, small and medium sized businesses are just as much at risk, often with less disposable budget to cover a costly cyber attack. You could even argue that smaller businesses are more vulnerable to cyber attacks as they often have weaker defences compared to larger companies.
Financial Impacts of Cyber Incidents
The financial implications of a cybercrime can be devastating to a business.
According to the 2022–2023 Cyber Threat Trends for Australian Business and Organisations report, the average cost of a business’s self- reported cybercrime was up by 14% (when compared to the previous financial year).
The reported average cost of cybercrime to Australian businesses were: “$46,000 for small business $97,200 for medium business $71,600 for large business”
Why are cyber attacks so costly?
Financial losses can quickly accrue in the fallout of a cybercrime as the following costs are often associated:
Loss of money directly due to the targeted attack (such as ransomware)
Legal fees
Fines
Operational downtime and loss of revenue
Customer reparations
Reputation damage
How to Protect Your Business From Cybercrime
The focus of protecting your business should be in prevention. Here are a few things you can start implementing today:
Educate yourself and your staff on the different types of cybercrime
Regularly backup important files
Turn on multi-factor identification for all onlines services your business uses
Use unique and strong passwords for each account you hold
Head to the Australian Cyber Securities website for the latest information on what your business should be doing.
While you can do all that’s in your power to protect your business, the risk of cyber threats will never go away especially considering that new cybercrimes are emerging, creating new and unknown hurdles. You can cover your business with Cyber Insurance so if your safety measures fail, you still have a safety net that will help your business get back on it’s feet.
How Cyber Security Insurance Can Help Protect Your Business
As highlighted above, cybercrime can be incredibly costly and often devastating to a business and its ability to continue to operate. When paired with the increasing risk posed to businesses seen by the continued increase in its occurrence, cyber attacks will be an ongoing threat. As cyber attacks become more sophisticated, the risk may increase further.
This is where having the right Cyber Security Insurance comes in as it can help protect your business by mitigating these costs.
One of the benefits of Cyber Security Insurance is that it’s adaptable to keep up with the evolving cyber threats. As new types of cybercrime emerge, insurance policies can be tailored to provide the right protection for your business’s specific needs. This makes Cyber Security Insurance just as essential as other types of coverage, such as business interruption insurance or public liability insurance.
How to get the right Cyber Security Insurance policy for your business
Every business is different, so it’s important to choose a cyber security insurance policy that covers your specific needs. Factors such as the size of your business, the type of data you handle, and industry-specific risks all play a role in determining the right level of coverage.
Knowing where to start can be overwhelming so partnering with an experienced insurance broker, such as us here at Broad Risk, can help streamline the process. We can help you determine your business needs by assessing your unique risks. We then find insurance policies offering comprehensive coverage to help protect your business.
You can also come to us to review your policy to check it continues to cover your business and any emerging threats.
If you’d like to get in touch with us to discuss cyber security insurance or any other insurance policies you may need, you can contact Warren directly on 0422 131 401
Alternatively, explore our website to view our other insurance services.
Learn more about professional indemnity insurance
Here at Broad Risk Insurance, we provide cyber insurance. You can learn more about professional indemnity insurance here or get in contact with Warren today.
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