How much cyber liability insurance do you need?
Many businesses, specially the start-ups or small businesses, make the mistake of undermining the risks of cyber security. When it comes to cyber theft, the primary idea is to get to the valuable consumer data. So, irrespective of the size, online businesses are increasingly getting vulnerable to cyber attacks.
To fight conditions such as ‘cybercrime’ and ‘data breach’, you need to protect your client’s information. Cyber liability insurance provides coverage for a business to recover from different cyber attacks. It will help your company respond in the event of data breach, hacking or any sort of virus attack. Strong passwords, regularly updating the software and maintaining a strong technical safeguard are pillar steps for upkeep of a safe technical asset.
Strong regulatory steps regarding data protection has raised awareness of cyber security. Cyber coverage is carved out of traditional insurances to ensure adequate protection. Interestingly, it is not just the large corporate but SMEs are also investing in including cyber coverage in their business insurance plans. Allied Market Research showed in one of its studies that cyber insurance market will reach up to US$14bn by 2022.
A cyber theft can be costly for your business
The Office of the Australian Information Commissioner (OAIC) released in the ‘Notifiable Data Breaches Scheme 12-month Insights Report in May 2019’, where it mentions clearly about the security landscape in the cyber world. In fact, it stated that –
· About 60% of data breaches were from malicious or criminal attacks, 35% from human error and 5% from faulty system
· Phishing caused 26% of malicious attack on data breaches
According to the Australian Criminal Intelligence Commission (ACIC) website, Australian economy gets hit by about $1 billion annually due to cyber crime. Cyber attacks such as Ransomware, Credential harvesting malware, Email spam and phishing, Online scam or fraud are some of the common patterns.
Understand your coverage
As you sign up for cyber insurance, the policies will typically include the following:
· Business interruption expenses
· Investigation and data recovery expenses
· Extortion price
· PR and crisis management control costs
· Claims from third parties
· Penalties, if any
That said, depending on type of coverage provided, cyber liability policies can be from $1 million to $5 million and even more. On an average, a $1 million aggregate limit is about $145 per month. The costs of such insurance vary depending on your business but a common calculation for premium is around $3,000 for a business that claims $5.5 million in annual turnover.
Although the 2019 reports state 83% of the breaches affected less than 1,000 people, the demand for cyber risk and protection measures is seeing popularity amongst risk management strategies. The shift from brick and mortar establishments to online has made many businesses completely rely on web. To fight the new set of risks, you have to be more well-informed as well as be updated with regular tech checks.