Boom in uptake of Cyber Insurance policies
After recently catching up with a few Professional Indemnity Underwriters and discussing the market conditions etc.; the question was raised, `are you finding it difficult for clients to take up or take out Cyber insurance?’ No, I replied. Instead what we have found as a company is that clients that are based in certain sectors such as recruitment/labour hire, healthcare and aged care are making sure that Cyber Insurance is now part of their insurance portfolio. A big factor has been the media coverage of recent events and pushing most of the time, well known brands into the spotlight. People are aware of the `yet to be determined’ Census night DDOS issue and are generally concerned of hackers shutting their business down and privacy issues with client information.
A great article that appeared on the Tech Crunch website back in June titled ` The cyber insurance market — an opportunity for the cybersecurity startup ecosystem (techcrunch.com; Jun 2016) had some very good points that businesses are becoming more savvy when it comes to risk management and wanting proper guidance around business (in this case Cyber) protection. A point raised in the article was that companies (SME) need to move away from the idea of `big business’ (using the example of Sony) only being targeted. Organisations need to assess their individual situation and understand that certain industries are more susceptible to a cyber-attack than others.
Another factor that will contribute to the increase of cyber insurance policies and programs will be the introduction of the mandatory data breach notification legislation in Australia. This has yet to be passed, but the general feedback in the market is that this will be in place sometime next year.
In short, what does this mean to an organisation?
The Commissioner has a range of enforcement powers, including:
“Failing to comply will result in penalties and infringement notices, with individuals facing fines of $340,000 and organisations up to $1.7 million on top of the damage already done by the breach. So to avoid this fate, many companies must closely follow these changes and develop strategies to mitigate the associated risks.” (Itwire, 2016).
All businesses are different and individual consideration needs to be made when looking at Cyber insurance. When having that discussion with your broker, ask the question, what Cyber Insurance product is best suited for my business?
If you have any questions regarding Cyber Insurance, feel free to contact me at [email protected] to discuss.