As a professional, you would be aware of the importance of such covers as Professional Indemnity for protecting you against claims relating to the conduct of your professional advice and Public Liability to protect you against incidents or accidents to the public, (if you’d like to discover the differences between each of these types of insurance policy, read our recent blog, Why professionals must not forget Public Liability risks). But there’s another increasingly prevalent risk that you as a business owner should consider protecting yourself against - cybersecurity breaches or related incidents.
Here are three ways your business can be impacted as a result of a cyber incident.
1. Loss of productivity and revenues
When your computer and internet systems are unavailable – whatever the reason – it results in you and your staff being unable to do their jobs. Lost or corrupted data is often difficult and costly to restore, and time delays can threaten the efficiency of your operations – resulting in lost revenues and angry customers.
2. Incurred costs
According to 2018 Chubb research of Australian small-to-medium companies, a key concern for 51% following a cybersecurity incident is the sheer cost, with the same proportion concerned about their profits.
Stolen data can compromise your business and result in financial damage to you and your customers, especially when payment and account details are accessed. Breaches of private or sensitive information about your customers of staff can also result in significant fines under Australian legislation.
3. Damage to your brand
In days gone by, companies that suffered cybersecurity breaches often tried to keep them ‘hush-hush’ to avoid embarrassment. Many organisations were tardy in notifying affected parties of security breaches, hoping that no-one would notice, or that the people stealing the data would not use or sell it for financial gain.
After all, the inability to protect your operational systems from outside malicious behaviour - or even inadvertent errors from inside – reflects badly on your organisation and its responsibility to your customers and business partners. There are many widely publicised examples of brand damage as a result of a cybersecurity breach, one of the more popular and widely publicised events was the now infamous cyberattack on Sony Pictures in 2014, when damaging internal email communications, employee information and then-unreleased films were accessed and revealed.
Not reporting cybersecurity breaches in Australia is no longer an option since the introduction of legislation in 2018 mandating reporting. Besides, in these days of heightened sensitivity to privacy and the widespread use of social media, breaches can be shared rapidly and widely, as well as mimicked, with devastating negative impact on a company’s reputation.
In Chubb’s 2018 research, 51% were concerned about their relationship with their customers after a cybersecurity incident, and 47% about their public reputation.
How to mitigate cybersecurity loss
However, as no technology system is ever 100% secure, one option to help mitigate your risk is taking out cyber liability insurance cover which can provide expert advice if and when you need it, as well as assisting you with out-of-pocket costs.
Find out more about the cyber vulnerabilities every business is has the potential to be exposed to in our article, Are you next? Three cybersecurity vulnerabilities every business faces. The Australian Government has also published a simple guide on how to develop a cyber incident response plan for your business, you can view the guide here.
To learn more about cyber liability insurance contact the Insurance House team on 1300 305 834 or email us at email@example.com
Our advice is general in nature to read the full General Advice Warning click here.