What is Cyber Liability Insurance?
Cyber liability insurance is a type of business insurance which protects your business against both the legal costs and expenses related to cybercrime
incidents. Your coverage may generally include cover for expenses and restoration costs relating to the following:
- Data breaches including theft or loss of client information
- Network Security Breaches
- Business interruption costs
- Forensic investigation into the cause or scope of a breach
- Data recovery costs
- Cyber Extortion
- Crisis management costs (to protect or mitigate damage to your businesses reputation resulting from a cyber event)
- Loss and Legal costs, including fines and penalties resulting from a third party claim for data or network security breach against your company
Almost every business is dependent on their data to operate. The moment you connect to the internet you open your business up to the possibility of being targeted by hackers. Whether your website is hijacked and defaced, or your sensitive data and client information is stolen, the costs of repairing the damage and the legal costs associated with a data breach can have a significant impact on your business, not to mention the damage it can cause to your reputation.
More than half of SME’s in New Zealand have experienced IT security attacks at least once a year, and seventy percent have been affected by viruses, malware and scams. The estimated costs to New Zealand businesses as a result of Cyber crime is $650 million annually* Cyber Liability Insurance is designed to protect your business against the expense and legal costs arising from data breaches which may occur after being hacked, or from the theft or loss of client information.
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Why does my business need to consider Cyber Liability insurance?
Cyber Liability insurance is designed to help safeguard businesses that use technology in their day-to-day operations. This can be from the simple things like sending an email to storing sensitive customer files and data online to conducting financial transactions online.
As a small business, the potential impact of a cybercrime event could have a dreadful effect on your business. There are things to worry about like the loss of critical client data, operational information as well as your networks capacity taking a beating. It isn’t just the financial destruction that a cybercrime can cause but also the damage to your business’ reputation within the community.
Cyber Liability insurance provides peace of mind for NZ SME’s by giving some much needed protection. It protects businesses against potential threats and exposures like data breaches, system interruptions, hacking and theft.
What is covered?
- Investigation and data recovery costs
- Business interruptions costs
- Fines and penalties
- Extortion costs
- PR and crisis management costs
- Website hijacked and defaced
- Computers infected with viruses/malware
- Data held to ransom
- Wrong email attachments
- Lost or stolen devices
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What type of businesses need to consider Cyber Liability insurance?
A general rule of thumb is that if you conduct any part of your business online then you exposed to the threat of cybercrime. Different businesses may rely and use technology to different degrees, but here are a few examples of some of the typical scenarios of when businesses may need to consider Cyber Liability insurance.
- If your business uses computers, phones, or any other electronic devices to help keep your business communicate with your clients, you are exposed to the potential risk of a system outage caused by a cyber event
- Retail and hospitality businesses heavily rely on certain technological equipment and connections to help process things like payment terminals, websites for sales and online booking/customer management systems.
- Manufacturing businesses majorly rely on their machinery as part of their day-to-day operations. If a virus or attack were to occur on their systems used to operate the machinery, it could cause massive disruptions to the businesses production of stock and products.
- Small business professionals are also at risk because of the sensitive client information and details that they keep on file in their databases. Not only is there the risk of a cybercrime event but also the potential for a privacy breach to occur.
How can I keep my business cyber safe?
These are a few tips to keep in mind when looking at additional ways to help keep safeguard and prevent your business from becoming a cybercrime victim.
- When was the last time you checked your IT security plan?
- Are all your software, malware and virus protection programs up to date across all devices?
- Do you have an IT register for IT equipment like laptops and mobile phones to track which employees have which devices?
- Is your IT infrastructure robust?
- Do you have an incident response plan if a cyber-attack were to occur?
- Are your employees up to date with cyber training and aware of certain online risks and what to do if they are faced with them
How much does a Cyber Liability insurance policy cost?
Like other business insurance policies, the cost of your actual Cyber Liability insurance policy will be unique to your own business’ circumstances and its exposure to risk.
Things like the type of business you are operating, claims history and number of employees are just some of the things insurers will take into consideration when calculating the cost of your policy.
My business doesn’t transact online, do I still need Cyber Liability insurance?
While your business may not have a website, chances are you still use a computer, a local network and server to hold important electronic files and records.
You may also do your business banking online, which involves sending and receiving invoices that may contain sensitive information about your business and your clients. This data could be jeopardised if a cybercrime event were to occur.
Get more information
If you would like to learn more about all things business insurance or perhaps brush up on some tips to help your small business save time and money, head to our blog for an assortment of articles on things small business. Here’s a few to get you started
While we’re on the topic of all things Cyber Liability insurance, make sure you check out our lingo-free and comprehensive guide that explores all things cyber.
* This information is a general guide only and does not take into account your objectives, financial situation or needs. As with any insurance, cover will be subject to the terms, conditions and exclusions contained in the policy wording. The information contained on this web page is general only and should not be relied upon as advice.
The provision of the claims examples are for illustrative purposes only and should not be seen as an indication as to how any potential claim will be assessed or accepted. Cover for a claim will depend on the specific circumstances around the loss and would be subject to the terms and conditions of the policy concerned.
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