Computer and IT systems are an essential part of many modern business operations. As technology improves, businesses are also shifting their operations online and working with increased reliance on the internet.
While this provided many advantages for businesses, it has also brought a new set of risks. Hackers have developed numerous ways to attack business vulnerabilities through IT systems and will especially target those which hold sensitive information.
Storing customer and client data safely has become a priority for modern businesses, but the risk of attack remains. While it isn’t possible to fully protect against being hacked, cyber insurance offers an important solution to help businesses reduce financial and reputational risks.
If you’re concerned about information security, here’s a look at the types of cyber insurance cover available to protect your business.
Data Breach
One of the largest risks for a modern business is data safety. Hackers and other parties may attempt to steal a business’s data for several reasons, including extortion or to sell off to a third party. This risk is especially dangerous for businesses with sensitive information, such as those in the medical and health industries.
These businesses are more likely to be targeted and are also subject to stricter legislation because of the amount of private information they store. In Australia, failure to comply with legislation surrounding data breaches can lead to penalties of up to $2.1 million.
Regulatory breach liability cover can help to insure a business against the cost of legal expenses and fines arising from an investigation by a government regulator.
Reputational Risks
Australian legislation under the Notifiable Data Breaches (NDM) scheme requires businesses to notify all affected parties of a data breach. Not only can this be an expensive and difficult task, it can also negatively impact a business’ reputation.
In other cases, private information can be leaked which defames a prominent person, causing a backlash against them, their brand and their associates, and leading to a drop in business.
Security and privacy liability cover can help to insure a business against the cost of damage to reputation following a data breach, such as one involving a loss of third party private data.
Copyright Infringement
Modern businesses are increasingly involved in online promotion, either through social media or their own website. Businesses, both large and small, can run the risk of breaching the copyright of materials they use, including music, images and other works.
Copyright violation, even if unintentional, can still be costly. Defamation and other lawsuits can also arise from incorrect attribution and misuse of intellectual property, leading to large costs for a business.
Electronic media liability cover can help to insure a business against the costs of copyright infringement, defamation claims and misuse of certain types of intellectual property online.
Cyber Extortion
Extortion can be a major concern for businesses. However, with the increasing capabilities of hackers, protecting a business’ data becomes a constant battle. Smaller businesses are equally likely to be targeted for their data, as they are expected to have weaker security.
Holding valuable data ransom for money is now easier than ever, with criminals demanding payment in near untraceable cryptocurrency. Managing the extortion process can be a costly, such as dealing with financial demands to regain access to important data.
Cyber extortion cover can help to insure a business against the cost of a cyber-attack, such as hiring negotiation experts, paying extortion demands and prevention of future threats.
Network Disruption
Many modern businesses will have important data and other assets stored on a shared business IT system. While this solution provides many benefits, it can also be vulnerable to cyber attack.
Whether for extorsion or other motives, a sophisticated cyber-attack can disrupt a business’ network and interrupt normal business activity.
Essential work files being deleted, corrupted or lost as a result of an attack can severely impact a business’ bottom line.
Electronic data replacement cover can help to insure a business against the cost of recovering or replacing your records and other business data following a cyber attack.
Businesses should consider the risks they face and seek the correct insurance to protect their assets. Appropriate cyber insurance can help your business to manage its costs and protect against the risks associated with cyberattacks.
About the Author
Daniel Defendi is an avid writer and researcher from Perth, Western Australia. When not writing, he enjoys reading, watching movies and blogging. You can catch him on LinkedIn to discuss this piece.
