Why you need to consider cyber insurance ASAP
Cybercrime is on the rise in Australia. Last financial year, ReportCyber recorded more than 67,500 cybercrimes, an increase of almost 13% from the year prior.
Self-reported cybercrime losses total more than $33 billion, or the entire GDP of Tasmania. These numbers alone are staggering. However, the rise of cybercrime activity during the COVID-19 pandemic when businesses were already vulnerable was even more concerning.
During the 2020-21 financial year, cybercrime against small businesses rose significantly. However, medium-sized companies suffered the highest average losses.
Source: Australian Cyber Security Centre
Protecting your livelihood means implementing safeguards against cybercrime. Cyber insurance, a relatively new offering in Perth, provides cover against losses resulting from these potentially devastating online attacks.
Put simply, cyber insurance could be the difference between closing your business forever or being able to and carry on after an attack.
What is cybercrime?
Cybercrime is the term for criminal activity carried out over the internet or using computers. It’s a broad term, much like “theft” can mean anything from a kid slipping a chocolate bar into their pocket through to looting a bank vault.
The Federal Government-run Australian Institute of Criminology defines cybercrime as “a growing, borderless and continually evolving body of crimes which can threaten individuals, businesses, government and national security.”
You might be familiar with some of the common examples:
- Ransomware: Software installed on a machine (locally) or network (remotely) to make the system unusable until the victim pays a ransom.
- Fraud: Accounting for nearly a quarter of Australian cyber attacks, criminals intentionally deceive the victim to gain money or information.
- Online banking: Unlawfully using personal information (including compromised credit card details at ATMs) to access an individual or business’ online banking portals.
- Identity theft: Stealing personal details to use them for fraudulent or other criminal activity.
- Business Email Compromise (BEC): Using fraudulent and “phishing” emails to target businesses, leading to fraud or ransomware attacks. BEC costs businesses more than $50,000 per average successful attack.
- Shopping: Stealing a person’s financial information (bank card details, for example) to shop online with their money.
- Investment: Coercing people into investing in schemes, scams and fake shares, usually initiated through phishing emails.
- Romance scams: Gaining the victim’s goodwill to commit fraud, most often by convincing them to give up money, bank details, passport information, or to commit financial fraud on their behalf.
Costs related to cybercrime
Small and medium businesses suffer nearly two-thirds (58%) of all cyberattacks in Australia, forcing 22% to shut their doors immediately. Every day in 2020, the Australian Cyber Security Centre (ACSC) received 144 reports of cybercrime relating to small businesses.
The total cost to small businesses alone edged over $300 million.
So, where do those costs arise?
- Ransom fees paid to hackers
- Lost revenue from downtime
- Fines issued by Government departments for data breaches
- Ongoing losses when systems can’t be secured
- Reputation damage
- Mounting a legal defence
- Defamation claims
- IP infringements
- Copyright breaches
- Replacing, securing or upgrading compromised machines after an attack
- Product lost through fraudulent transactions
- Money stolen from compromised bank accounts
- Money transferred to fraudulent investments
- Investigating the cause
It’s not hard to see how cyber attacks cost businesses upwards of $30,000 at a time.
But small and medium businesses aren’t alone in bearing the costs. Keep reading to find out how Perth cyber insurance can protect your livelihood in case of an attack.
Why are cyber criminals targeting small and medium businesses?
Small and medium businesses suffer so much because there is a “perfect storm” of sophisticated hacking methods and lax cyber security on the victim’s end.
Ransomware attacks are getting more detailed, and SMEs are falling victim to financially devastating scams too often. As the COVID-19 pandemic caused us to spend more time online than ever, hackers took notice, exploiting our need for information to carry out fraud and ransomware attacks.
Cyber security is an investment that businesses choose not to make, which leaves their networks open to nefarious attacks.
What can you do to protect your business against cybercrime?
Small and medium businesses can insure their losses in a few ways. The first is by strengthening networks, machines, devices and protocols against cyber attacks. The second – where Connect Business Insurance comes in – is taking out cyber security insurance.
Small Business Cyber Security Guide
The ACSC works hard to help individuals and businesses stay protected against cybercriminals. And they have good news for small and medium business owners: cyber security doesn’t need to be difficult.
The ACSC’s Small Business Cyber Security Guide is a great resource to help small and medium businesses minimise cybercrime risk. It’s tailored for time-poor (and non-tech-savvy) business owners, with tips and guides on strengthening your systems.
Internal protocols can only reduce your risk, not eliminate it. Unfortunately, hackers and fraudsters are usually one step ahead of small businesses, and they’re always getting more sophisticated.
Cyber insurance is your financial safeguard against these crippling attacks. Connect Business Insurance is among the first to offer cyber security insurance in Perth because we believe in protecting Australian businesses.
Cyber insurance comes in many forms:
|Types of cyber insurance||Potential benefits|
|Losses Caused by Interruption of Business||Covers lost revenue from a cyber attack|
|Cyber Extortion||Covers losses sustained to pay ransoms or hire experts to prevent future cyber attacks|
|Replacing Electronic Data||Pays the recovery cost for data lost in a breach|
|Privacy and Security Liability||Covers reputation damages arising from a third-party data breach|
|Defence Costs||Pays the legal costs to mount a defence after a cybercrime|
|Electronic Media Liability||Covers defamation claims, misuse of intellectual property, and copyright infringement costs|
|Regulatory Breach Liability||Pays the fines arising from a government-sanctioned investigation|
Your specific cover will vary depending on the industry, scale and risk factors relevant to your business. However, what you need to know is that cyber insurance is a big help in recouping costs.
When every Australian business relies on technology and the internet to work, they also rely on cyber insurance to keep the doors open when the unthinkable happens.
Contact Connect Business Insurance for a personalised cyber security insurance quote
We tailor our policies to your requirements to ensure the type and amount of cover suits your business. Contact Perth’s cyber insurance experts at Connect Business Insurance to understand cyber insurance in more detail.