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Cyber Insurance

11 November, 2020

Cyber risk or hacking is now considered as one of the world’s largest forms of fraudulent activity.

The criminal’s goal is to steal valuable information such as credit card data, banking details, date and place of birth, medical information and other personally identifiable information that can be sold on through global criminal networks.

Ransomware attacks in particular have recently accelerated, driven by the success of cyber criminals to get more than half of today’s business victims to pay their ransom demands (Source: Cyberworqs). Ransomware is a rapidly expanding, multibillion-dollar criminal business which is expected to continue to grow rapidly, across the globe including in Australia.

All companies regardless of size and sector are targets, and the risk of loss of sensitive personal or business information is expanding as companies hold more data on servers and in cloud platforms.

According to global cyber security firm CrowdStrike, cyber criminals or hackers continue to be relentless and innovative in their efforts to find gaps in every organisation’s IT infrastructure whilst the Australian Cyber Security Centre reports that at present they receive one cybercrime report every 10 minutes.  

Even where there is no third party criminal actor involvement, a simple privacy breach can strike the most carefully managed business and cause embarrassment, brand damage and considerable expense to mitigate the consequences.

Any of the following events or attacks could affect your business this week:

a. Your company’s confidential information is accessed or lost.
b. Your company suffers a ‘denial of service’ attack.
c. Your company is the recipient of malicious code, software or virus.
d. Your company’s computer system is suspended or degraded and is unable to continue normal operations.
e. A regulatory investigation involving your company is launched as a result of a cyber or privacy breach event.
f. Your company receives a written demand from a client as a result of a cyber or privacy event.
g. Extortion threats are made against your company demanding payment or transfer of money in order to avoid a breach of your information security, an attack on your computer system and/or publicly disclosing information regarding vulnerabilities in your computer system.

If you fall victim to one of these events, Cyber insurance will help your business to restore network systems and data while seeking to minimise losses from business interruption. Cyber insurance coverage includes the following key features:

  • Information Technology Expenses – costs incurred to deploy an IT specialist to contain and control a hacking event.
  • Legal Expenses – the cost of expert legal advice to explain your statutory and common law exposures and responsibilities, and help you defend and manage any third party liability claim arising from a failure of your network security or a failure to protect data.
  • Business Interruption costs – loss of turnover/revenue incurred whilst your critical systems are compromised or shut down, and necessary additional costs of working until they are restored.
  • Data Recovery Expenses – costs incurred in identifying lost, damaged, destroyed, encrypted or corrupted Data and if that data can be restored and repaired.
  • Credit and ID Monitoring Expenses – the cost of specialist services to identify possible misuse of any Personal Information as a result of an actual or suspected breach of confidential Information, along with your obligations to support those whose personal information and privacy has been breached.
  • Continuing Fixed Costs – such as operational costs including payroll following an interruption to a company computer system as result of an intrusion (hack) or even an unplanned system outage.
  • Fines and Penalties – where insurable at law, imposed under various privacy laws for breaching privacy and data protection legislation.
  • Extortion payments – to end extortion claims including payment of cryptocurrencies.
  • Other costs – varies from insurer to insurer e.g. social engineering/phishing fraud.

The first 24 hours are critical when responding to a cyber incident and Cyber insurance will give you access to immediate incident response resources with a panel of cyber breach specialists (legal, forensic, technical, brand and public relations)  who will assist you in closing the breach and getting your business back on its feet.

The Austbrokers Corporate difference:

At Austbrokers Corporate we have a dedicated Financial and Professional Risks team who specialise in arranging Cyber Insurance for our diverse client portfolio. Our clients operate in all industry sectors and we are therefore able to identify and facilitate Cyber Insurance products that address our clients’ individual risk profiles in this area. The Cyber Insurance landscape is vast and complex with numerous options and risk solutions available. Our focussed team of experienced insurance broking professionals can assist you in navigating this landscape and obtaining the most appropriate coverage to mitigate your specific Cyber risk exposures.

Mark Winwood or Simon Spencer (Sydney)
Level 14, 141 Walker Street
North Sydney, NSW, 2000
0423 461 485; Mark.Winwood@austbrokerscorporate.com.au
0432 688 349; Simon.Spencer@austbrokerscorporate.com.au

Kris Ekeberg (Melbourne)
L2, 99 William Street
Melbourne, VIC, 3000
0401 792 750; Kris.Ekeberg@austbrokerscorporate.com.au

Steve Pickett (Brisbane)
Level 22, 345 Queen Street
Brisbane, QLD, 4000
0410 478 123; Steve.Pickett@austbrokerscorporate.com.au