SMALL BUSINESS CYBER INSURANCE
AMC INSURANCE PTY LTD
SMALL BUSINESS CYBER INSURANCE
Small business cyber insurance in Australia protects your company from financial losses, legal costs, and business interruption caused by data breaches, ransomware, and cybercrime.
We are AMC Insurance, brokers providing high service standards, quick response times, quality professional advice (in easy-to-understand language!), and peace of mind to Australian businesses.
WHAT IS CYBER INSURANCE?
In short, cyber insurance, also known as cyber liability insurance, is a product designed to protect you from various risk exposures of conducting your business online and via a network of computer systems and devices.
WHAT IS CYBER INSURANCE COVERAGE?
Due to the complex nature of these insurance products, it is hard to briefly outline what is cyber insurance and what does it generally cover. As a quick overview, these policies cover against the types of risks below:
- Privacy and Security
- Regulatory Defence, Fines & Investigations
- Privacy Notification Costs
- Crisis / Management Costs
- Cyber Extortion
- Hardware Damage
- Business Interruption
- Data Recovery
- Social Engineering / Fraud
WHAT IS CYBER INSURANCE AND WHY DO YOU NEED IT?
Think of insurance as a transfer of risk, or a safety net. You pay someone (a premium) and in return they (an insurer) take on the exposure of the risk for you (subject to the terms of the insurance contract).
As a small business, you can take many steps to protect you from the risk of hacking, cyber threats and human error, but if those systems and procedures fail then your business may suffer catastrophic losses that you are unable to financially recover from.
If you have protection under a cyber security insurance policy, then your business can transfer financial losses to your insurance company and have steps provided in how best to respond to the incident.
HOW TO ACCESS SMALL BUSINESS CYBER LIABILITY INSURANCE
Cyber liability is available for small business cyber insurance risks. If needed there are even some policies available from some insurers offering micro limits (e.g. $50,000; $75,000; $100,000). However, as an insurance broker, we feel that most small businesses should still consider standard policy limits that may be more appropriate (e.g. $250,000; $500,000; $1,000,000; and higher).
Before you investigate the costs of cyber liability insurance products it is important to first consider how you can protect your small business from cyber threats, hacking attempts, and user error.
We’ve provided some examples below accessed from the https://www.cyber.gov.au/news/take-a-second-to-stay-secure-this-cyber-security-action-month website – which, although are outlined for individuals, are appropriate for small businesses too:
- apply updates to devices, systems and applications when they become available
More reading: https://www.cyber.gov.au/publication/personal-cyber-security-handbook/keep-your-devices-and-software-up-to-date
- perform regular backups
More reading: https://www.cyber.gov.au/publication/personal-cyber-security-handbook/secure-your-devices
- turn on multi-factor authentication for online accounts
More reading: https://www.cyber.gov.au/publication/personal-cyber-security-handbook/set-up-multi-factor-authentication
- learn to recognise scams and report them
More reading: https://www.cyber.gov.au/learn-about-scams
- set long, unique passwords
- know the threats by signing up for our alerts and advisories.
More reading: https://www.cyber.gov.au/sign-up-for-alerts
- check and manage privacy settings
- think before you share on social media
Currently there are a high number of cyber insurance companies providing access to cyber products. More insurers in the market can mean higher levels of competition on premiums and broader coverage offers. Insurers still have an expectation that small businesses will have cyber security risk management processes in place before offering cover. Some examples of cyber risk management expected by insurers might be:
- If there have been any previous cyber incidents or claims (regardless of whether you claimed against an insurance policy)
- If you deploy an active business grade firewall at all external gateways of your network
- That you have active business grade an active antivirus application across your entire network, including servers or endpoints
- That you (or your cloud service provider) backup your data to an isolated environment at least every 7 days and test it at least annually.
- If you secure all remote access to your network with a minimum of multifactor authentication.
- If you install critical patches within 30 days of release.
- What your exposure is to personal data collected on your employees, customers, suppliers, etc. and how this data is managed and protected.
- If there is a a written procedure whereby, all new (including changes to existing) payment details or contact details are confirmed by an alternative method to the original method used, before any payment is made.
- Whether you maintain procedures, at least annually, for the provision of written training materials to all employees relating to the dangers of social engineering fraud, phishing and cyber fraud.
WHAT CYBER INSURANCE COVERS
There are various risk exposures for every business (big or small) when operating online or via a network of computer systems and devices. Examples are outlined below of which many cyber liability insurance policies may look to provide cover against:
Cyber security risks and threats
- Denial of service attacks (more reading: https://en.wikipedia.org/wiki/Denial-of-service_attack)
- Unauthorised access to data and networks for illicit use (more reading: https://www.criminal-lawyers.com.au/offences/unauthorised-access-modification-restricted-data)
- Discovery of vulnerability (more reading: https://www.ituonline.com/tech-definitions/what-is-vulnerability-discovery/)
- Intrusion and interference with data and networks (more reading: https://www.cynet.com/security-foundations/attack-techniques/network-security-complete-guide-to-threats-and-how-to-defend-your-network/)
First-Party Losses
These are losses that your business incurs and is directly impacted by:
- Property damage and repair or replacement of tangible assets (servers, computers)
- Property damage and repair or replacement of intangible assets (data, software)
- Theft of proprietary information or data
- Business interruption – i.e. a loss of revenue/income
- Damage to company assets from malware
- Incident response costs (more reading: https://www.chubb.com/content/dam/chubb-sites/chubb-com/au-en/business/technology-liability-insurance/documents/pdf/cyber-incident-response-platform.pdf)
- Forensic investigation and dark web monitoring (more reading: https://hawkeyeforensic.com/unmasking-the-invisible-a-complete-guide-to-dark-web-forensics/)
- Social Engineering – i.e. fraudulent transfer or manipulation to release funds and financial securities (more reading: https://www.360uw.com.au/social-engineering-phishing-scams-the-silent-cyber-threat-you-cant-afford-to-ignore/)
- Ransomware costs (more reading: https://www.cfc.com/en-au/knowledge/resources/articles/2024/02/does-cyber-insurance-cover-ransomware/)
Third-Party Losses
These are losses that your business has caused to happen or occur to a third-party:
- Property damage to tangible hardware and property
- Property damage to intangible software property
- Denial of access or use, unauthorised copying of data
- Causing the transmission of malware
- Unauthorised use of confidential information
- Loss of expected goods and services
- Failure to prevent unauthorised access, use or interference of data or networks
- Defense expenses for legal costs incurred
NEXT STEPS
We will continue to expand our resources and content on cyber liability and cyber security insurance risks for all businesses. If you require any assistance obtaining quotes for your small business cyber insurance please take the next step by completing our online quote request form.
Alex Conlon
Director | M: 0409 092 947 | E: alexc@abterrace.com.au