What Businesses Should Know About Cyber Liability Insurance
If your small business relies on digital technology to make sales, communicate, or keep data, you are subject to "cyber liability" or "cyber risk."
As strange as it may sound, cyber risk will be a genuine threat in 2022, costing the global economy more than $450 billion each year. These expenses might result from various circumstances, such as having your website hacked or being sued for anything you published online. Fortunately, cyber insurance may help.
What is Cyber Liability Insurance?
Cyber liability insurance is a form of property insurance that will cover financial losses, and sometimes physical damage, resulting from a cyber attack.
As technology becomes more ubiquitous, cyber liability is becoming a major issue. Because small businesses tend to focus more on their core competencies than on technology, they are often targets of cybercriminals, who may target them to gain access to many customers or client data.
What Does Cyber Liability Insurance Cover?
Cyber liability insurance aims to protect your business and its finances and prevent major losses. These policies usually provide coverage against the following:
This coverage will pay for the expenses related to the theft of private data. This includes costs related to legal representation, damage to your reputation and lost profits.
This coverage pays for expenses related to unauthorised access to your computer system. This includes the cost of hiring a lawyer and any penalties imposed on your company.
This coverage reimburses your company if there is physical damage to your computer hardware or software due to a cyber-attack.
This coverage will pay for the theft of your computer system and its accessories, as long as you can prove that the theft was related to cybercrime.
Legal Defense Costs
This coverage will pay for your legal defence costs if you are charged with cybercrime.
Does My Business Need Cyber Insurance?
The answer to this question depends on your business' needs. As a general rule, small businesses (under $10 million in revenue) have less exposure to cybercrime and do not need to obtain cyber liability insurance.
However, there are several reasons why it could be beneficial for your business to obtain a policy.
Generate a large amount of revenue from e-commerce.
Store sensitive client information.
Pay for your employees' personal devices to access your network.
Have a high turnover rate for your IT staff.
The Cost of Cyber Liability Insurance Vs. The Cost of Cyber Crime
According to the Australian Government's Stay Smart Online campaign, cybercrime costs businesses roughly $276,323, with detection and recovery accounting for 53% of the cost.
This is why cyber liability insurance is a good idea. The expenses of obtaining coverage can vary depending on your unique organisation, but as a general rule of thumb, a policy can cost roughly $3,000 for a company with a $5.5 million annual revenue.
The reality is that cyber-attacks are on the rise, and the sooner you can get your business covered against such attacks, the better.
Cyber liability insurance, when coupled with a sound IT strategy, will allow you to remain profitable even if your small business falls victim to a cyber attack.
If you want to protect your business assets, New Wave Insurance has you covered. We provide cyber protection insurance on the Gold Coast to help you out. Get the protection you need by contacting us today.