Cyber insurance has been thrown around a lot in recent media articles due to the constant cyber threats faced by Australian organisations but reports have shown that in the U.S. 60% of companies who suffer a cyber attack will go bankrupt within 6 months. This percentage is staggering, many predict that it will be a very similar situation when more data is available for the Australian market.
The 2018 Allianz risk barometer report from 1,911 risk experts across 80 countries indicates that business interruption and cyber incidents rank as the number 1 & 2 major threats to companies through 2018 and in the future.
Aside from technical solutions, awareness and a strong security culture are the most important factors when preventing cyber attacks. A majority of cyber insurance claims stem from relatively simple methods like email phishing rather than the complex attacks which are seen in films. Let’s review some cyber insurance claims and see how these organisations were impacted and the costs covered by cyber insurance.
Australian hardware store with approximately 20 employees and annual revenue of $5 million.
Description of event:
In a standard case of phishing, an employee at a hardware store ignored internal policies and procedures and opened a seemingly innocuous file attached to an email. The next day the hardware store’s stock order and cash registers started to malfunction and business trade was impaired as a result of the network failing.
The hardware store incurred over $100,000 in forensic investigation and restoration services. They also had additional increased working costs of $20,000 and business income loss estimated at $50,000 from the impaired operations. Total costs associated with the event came to $170,000.
Professional Services Firm
A professional services firm with 25 employees and approximately $7 million in annual revenue.
Description of event:
A rogue employee accessed the human resource platform of a professional service provider. The employee acquired and sold social security information on the black market before being apprehended by law enforcement. Thereafter, several cases of identity theft were perpetrated against the professional service provider’s employees.
The professional service provider engaged a forensics investigator and outside compliance counsel. It also notified employees of the breach, established a call centre, and provided monitoring and restoration services to impacted employees. Total costs associated with the event $75,000
As can be seen by the above cyber insurance claims and previous articles here and here, Australian businesses are vulnerable to a wide variety of scams and attacks from both internal and external sources.
Cyber insurance is a cost effective way to mitigate the expenses faced by all businesses after an attack or data breach.
Contact Cyber Insurance Australia today for a review of your existing insurance policies and a competitive quote.