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5 reasons why you need cyber insurance for your business

April 29, 2016

The Australian Government’s new cyber security policy includes a pledge of $230 million, which will be allocated to the fight against cyber-crime.

Given more and more businesses transact online, the Government sees cyber-crime as one of the biggest threats to Australia’s economy.

If you’re in business, here are 5 more reasons why you really do need cyber insurance.

  1. You rely on a computer, in any way

Cyber insurance (also known as cyber liability insurance) was unheard of 15 years ago. Today, it’s as necessary as worker’s comp.

If you rely on a computer, in any way, to run your business, you need cyber insurance. Consider what would happen if your computer was hacked, and someone gained access to the private information of all of your customers, including their credit card details?

The fallout could put any operation out of business, which is especially scary given hacking is a significant and real risk.

  1. You don’t have a risk management team

Big corporations can have whole departments dedicated to creating policies and action plans, which deal with potential risks, including cyber crime. If you’re a small or even a medium sized business, chances are you don’t have a risk management team.

A good cyber insurance policy bridges the gap for businesses that don’t have the luxury of a risk management team.

In many cases, an insurer will require you to put in place firewalls and other protections against cyber crime before allowing you to take out a policy. This ensures your business is better protected against cyber threats, plus you get the benefit of being covered.

  1. A general policy may not cover cyber crime

Most general liability policies do not include losses incurred due to the Internet. A comprehensive cyber insurance policy fills this important gap.

You might be wondering why a general liability policy doesn’t cover you for cyber related injury. A general liability policy covers your legal liability for 3rd party property damage and personal injury. This means someone needs to be identified as responsibly for the loss, and some physical damage needs to occur.

As electronic data is not considered to be ‘physical property’, it cannot be physically damaged. Cyber insurance offers tailored cover for your business for 1st party and 3rd party losses, breaches to the Privacy Act and loss of profits following the insured event.

  1. You may be responsible for data, even if you don’t host it

If you have information stored on a Cloud database, you may be surprised to know that in many cases, you are still legally responsible for how this information is handled.

This is why it is important to read the fine print of your Cloud hosting contracts. If you do find that your Cloud provider is not responsible for mistakes or breaches to your data, at least you are protected.

  1. It’s affordable

Securing cyber insurance cover doesn’t have to break your budget. With the right insurer, you can secure affordable cover that is also comprehensive. Trident Insurance Group can provide quality cyber insurance cover to businesses all around Australia.

If you’d like to get covered against the threat of cyber crime, or want your existing cover reviewed, please contact us.

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