When it comes to cyber crime, no business is too small to be a victim. Cyber criminals and hackers can target businesses of any size if they are able to get their hands on valuable data that they can on sell. With the world becoming increasingly digital and more and more businesses conducting business online, the number of cyber attacks is on the rise.

There have been several high-profile cyber-attacks over the past few years that have targeted well-known brands.

In 2014, cyber thieves stole data on 145 million eBay customers by hacking three of their employees. The hackers got in using the credentials of three employees, eventually making their way to the user database. They accessed email addresses and encrypted passwords belonging to all eBay users. Fortunately, financial information was stored in a separate location and not stolen but this still left eBay users vulnerable to identity theft and eBay suffered serious risk to their reputation.

In July 2015, hackers stole the user data of commercial website Ashley Madison. 30 million users worldwide had their personal details stolen and then published online.

While these are high-profile big business examples, small businesses are just as vulnerable to cyber crime, with close to 30% of Australian businesses having experienced a cyber attack of some form, which has cost the Australian economy billions of dollars.

Why are hackers interested in small business?

Many small business websites are often used as “watering holes” or loopholes to break down the security and access the systems of other businesses.

They are an easy target for sophisticated hackers as they often don’t have sophisticated security systems in place to prevent an attack, making them an easy target for their customer data, intellectual property and bank account information.

Take for example the small recruitment firm which, over a three-year period experienced three separate instances where their systems were breached.  Bank account and drivers license details of 500 on-hired contractors were hacked and stolen.

Cyber risk isn’t just about hackers

Cyber risk also covers such things as:

  • simple employee mistakes, like a staff member accidentally making confidential information public
  • receiving and sending viruses
  • cyber loss as a result of theft or loss of a device.

Such an example is the drug testing consultant who left his laptop at a sports ground.  He was able to claim $70,000 for Business Interruption, notification costs and his defence costs for the breach of privacy.

Make cyber liability insurance part of your risk management plan

Cyber liability insurance provides protection against the expenses and legal costs associated with data breaches. Having cyber can help mitigate a few ways a business can be impacted financially including:

  • Brand reputation: this is likely to be one of your most import assets, so you will need to protect and potentially repair any damage.
  • Interruption to business: this could include temporary downtime, lost income and potential loss of sales.

Cyber Insurance policies can provide you cover for the following:

  • Compensation claims
  • Investigations/Forensics
  • Fines & Penalties (Associated with the new Privacy Act)
  • Defence
  • Credit Monitoring
  • Cyber Extortion
  • Data Restoration
  • System Repair
  • Notification
  • Public Relations
  • Business Interruption

Isn’t my other insurance cover enough?

Take time to review your current policies (especially the exclusions) and see if your existing business cover can respond to a cyber or data breach claim. Handling a cyber attack or data breach alone can be difficult so it’s worth protecting your business and making a cyber liability insurance premium part of your risk management plan.

Premiums vary by insurer, the type of cover selected and your risk profile.  However, a policy with $100,000 cover could cost as little as $350 per annum.

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Sam Edmond

Sam Edmond is Digital Marketing Manager for Live group. His digital marketing experience includes roles in Auckland, London, and Sydney. Sam is a Kiwi and supports Arsenal F.C.