24 Apr Cyber insurance and your business
Cyber insurance and your business
It might be easy to dismiss cyber crime as completely irrelevant to your business on account of its unfamiliar nature — who would actually take the time to exact a cyber crime against your business when they could be hitting the big leagues, right?
In fact, small to medium enterprises (SMEs) have been the slowest to protect against cyber crime, making them more vulnerable to the threat. When you consider that almost all businesses have an internet presence or make use of the internet in their everyday business dealings, it becomes pretty clear that cyber crime presents a risk to even the smallest businesses.
Pretty much every business — be it big or small — will be reliant on data to some extent. Such data can include employee profiles, private corporate information, any identifying numbers (like Medicare and driver’s licence numbers), and information of a personal nature about customers, budget details and credit card information. The consequences of such data being breached and made public can be wide-ranging.
So, let’s have a look at cyber crime and insurance a little further so that you can make a more informed decision about whether or not it’s worth looking into for your business.
What is a cyber crime?
In basic terms, cyber crime is a blanket term for any type of activity of a criminal nature that is carried out using a computer and/or the internet. Cyber crime includes the following:
- Identity theft
- Cyber stalking
- Use of malware
- Use of viruses
- Computer and network hacking
- Online scams
- Phishing scams
- Information theft
Criminals don’t necessarily need to hack your systems to commit cyber crime; if they manage to get their hands on a laptop, iPad or mobile phone belonging to your business (either because it has been stolen or left unattended), they have easy access to your information and are able to more easily commit their crimes.
How will cyber crime affect my business?
The ways in which cyber crime can affect your business are actually a lot more expansive than one may have initially thought and are usually not contained to a defined period of time; rather, the effects tend to be ongoing and costly.
Beyond the general business interruption, a breach of data that results in personal information of customers or employees being made public can result in significant fines, legal fees, and costs associated with investigating the breach and notifying customers of the potential effects it may have on them.
Consider also the loss of business. Your existing customers are unlikely to continue being your customers if their personal information becomes public — and even if a cyber crime committed against your business doesn’t directly affect them, the fact any crime was able to be committed at all will leave them feeling uneasy.
A cyber crime against your business could also affect your reputation and drive away potential customers who may think twice about dealing with you given your company’s cyber security shortcomings.
How can I reduce my risk of falling prey to a cyber crime?
Just like ordinary crime, there is no foolproof solution, however there are certain tasks you can do to help mitigate the risk of a cyber crime, including the following:
- Use reputable anti-virus programs
- Secure regular data back-ups
- Utilise firewall technology and data encryption
- Update security software regularly
- Sign up to Stay Smart Online’s Alert Service and
- Put in place an online security awareness program to keep you and your staff informed about good online security practices
Stay Smart Online has published a second edition of the Small Business Guide. This guide assists business owners and management in adopting simple but effective procedures which will contribute to protecting their business online. As a proud partner of Stay Smart Online, we encourage you to take 5 minutes to read this guide and implement some procedures to help protect your business online.
What does cyber insurance cover?
Although policies will vary between insurers, a typical cyber insurance policy is designed to help you with both preventing breaches in the first place and dealing with them if and when they occur. Cyber insurance policies usually include the following:
- The cost of restoring or recreating electronic data following a breach or leak
- Forensic services to investigate a breach
- PR coaching in the event a breach harms your business’s reputation
- Assistance guarding against data breaches, hacking and employee error
- Guidance on how to respond to a breach
- Funds to cover the adverse financial effects related to a breach
- Funds to cover any fines that might be payable following a breach
How can I determine whether or not I need cyber insurance for my business?
If you are unsure of the need for cyber insurance, feel free to speak to a CRM Broker. We can discuss your business operations in detail and determine whether it is critical to mitigate your risk through a cyber insurance policy.
As always, don’t be afraid to ask as many questions as you need to have a solid understanding of your insurance needs, the threats such insurance is designed to guard against and the details of any policy you are considering purchasing.
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