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Cyber Liability Insurance: Why Your Business Needs it

It doesn’t matter what industry you’re in, no individual or business is safe from cyber hacking.

Data breaches, malware and cyber extortion are a business reality and can affect more than operational inconvenience. For small to medium businesses, the impost to recover from such breaches can be financially crippling.

All businesses should consider their liability and address cyber security as a priority.

Technology plays a pivotal role in how most organisations do business. As electronic records and online transactions increase, so do cyber risks.

To be prepared and protect against digital crime, cyber liability insurance is available and should form part of every business’ security plan. Here’s what you need to know if you’re looking to increase your security measures.

What is Cyber Insurance?

Cyber liability insurance helps covers your business’ liability for a data security breach.

It’ll protect against financial losses and damages relating from cyberattacks including:

  • Legal fees
  • Identity protection solutions
  • Restoring personal identities of affected customers/clients/suppliers
  • Recovering compromised data
  • Notifying affected people about breach
  • Repairing damaged systems
  • Repairing damaged reputation / public relations

Weigh the Risks

Although cyberattacks can affect anyone, some businesses carry a higher risk of being targeted. For example, medical practitioners or accountants manage sensitive data/records that could prove detrimental in the wrong hands.

If a cyberattack occurred, any subsequent penalties could financially cripple your business.  Valuable data, such as customer names and contact information, employee details, medical records and banking figures are vulnerabilities when your business uses digital vehicles that serve as gateways to cyber attackers.

Manage Your Risk Profile

For optimal protection, manage your risk profile and combine cyber insurance with other security measures.

Avoid being seen as a high risk business by protecting client and patient information. Although cyber liability is necessary, insurance policies are a contingency and businesses should have a supporting mechanism to mitigate the consequences of a breach.

Other ways to protect your business are:

  • Update passwords every 3-6 months or when staff leave and use strong variations, including a mix of symbols, lower and uppercase, number and/or use of different spelling
  • Back up digital systems and files daily via a portable hard drive or cloud storage
  • Ensure you have anti-virus software on all computers and laptops and upgrade it as prompted
  • Engage with an IT professional to manage system backups and tech security
  • Engage with an insurance broker to assist with risk management

A good risk management plan includes risks specific to your business and the potential consequences of a cyberattack. As part of this plan, regularly review whether risks should be accepted, mitigated, eliminated or transferred, with a clear plan of action for each risk. Transferring risk is where the need for cyber insurance comes into play.

Are You at Risk?

Any business which relies on technology and online systems is at risk of cyber related information. breaches.

If you store customer data digitally, collect online payment information or use the cloud, there’s also a risk to your patients, clients, customers and networks.

Some risk exposures to be aware of include:

  • Employee negligence, such as losing a laptop or forgetting to log out
  • Theft of patient and employee data, which can be targeted or random
  • Extortion by encrypting data or disabling systems, so you’re unable to access business or client/customer data
  • System outages and data breaches caused by a breakdown in a supplier’s security

Don’t think your business is at risk?

According to Norton, 516,380 Australian small businesses fell victim to cybercrime in 2017. To avoid hours of downtime, high expenses and potential reputation damage act now to keep your business safe from cyber threats.

Author Bio:

This article was written by Jayde Walker (Ferguson), a local Senior Content Creator in the small business industry. Catch Jayde on LinkedIn.

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