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Cyber Insurance

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What is Cyber Insurance?

Cyber and computer crime is one of the most significant risks facing businesses globally, with smaller businesses being particularly vulnerable. Cyber insurance safeguards your digital assets and the private information of your clients and employees.

There are two main types of cyber insurance: Cyber Crime Insurance and Cyber Liability and Privacy Protection Insurance.

Cyber Insurance

Cyber Crime Insurance?

This policy provides coverage for the theft of money resulting from a cybercrime event. It protects against financial losses caused by cybercriminals through fraudulent activities.

Cyber Liability and Privacy Protection Insurance

This policy covers a wide range of costs and expenses associated with a cyber event or privacy breach, including:

  • Insured Costs and Expenses: Legal fees, investigation costs, and other expenses incurred in responding to a cyber incident.
  • Fines and Penalties: Regulatory fines and penalties imposed due to data breaches or non-compliance with data protection laws.
  • Business Interruption Costs: Financial losses resulting from the interruption of business operations due to a cyber incident.
  • Third-Party Costs: Claims and damages from clients, customers, or other third parties affected by the breach.

Who Needs Cyber Insurance?

In today’s digital landscape, no business is immune to cyber-attacks. It only takes one successful cyber-attack to cause significant financial and reputational damage. Cybercriminals are becoming increasingly sophisticated, making it challenging for small businesses to stay abreast of emerging risks.

Cyber Insurance

Key reasons why businesses need cyber insurance

  • Small and Medium-Sized Enterprises (SMEs): SMEs often lack the resources and expertise to implement robust cybersecurity measures, making them prime targets for cybercriminals.
  • Businesses Handling Sensitive Data: Companies that collect, store, or process sensitive customer, client, or employee information are at a higher risk and have a greater responsibility to protect that data.
  • Industries with Regulatory Requirements: Sectors such as healthcare, finance, and retail are subject to stringent data protection regulations and face severe penalties for non-compliance.
  • E-commerce and Online Services: Businesses operating online platforms are exposed to a higher risk of cyber-attacks and data breaches, necessitating comprehensive cyber insurance coverage.
  • Organizations with Remote Workforces: The rise of remote work has increased vulnerabilities, as employees may use less secure networks and devices, heightening the risk of cyber incidents.

Ultimately, any business that relies on digital operations and data should consider cyber insurance as a critical component of its risk management strategy.

Cyber Insurance Claim example

The Insured is a small IT consulting firm who becomes the target of a sophisticated phishing attack when an employee unknowingly clicks a malicious link which allows cybercriminals to access the company’s network. The cybercriminals install malware, exfiltrate sensitive client data, and transfer money from the company’s bank account. 

The Insured lodge a claim under their Cyber Crime and Cyber Liability and Privacy Protection policies and receive $125,000 to cover the stolen funds, the investigation and response costs, notification and credit monitoring, legal fees, and lost revenue. 

The Cyber insurance policy not only mitigated the financial impact of the event but helped the company to restore operations and client trust. 

How Brindabella Insurance Brokers Can Help Your Online Business

Brindabella Insurance Brokers have been assisting online businesses for over a decade. We understand the risks and exposures you face and how to mitigate them with affordable insurance packages. Gain confidence to trade globally with the support of an experienced Insurance Broker.

Frequently Asked Questions

Fortunately, Business Interruption Insurance is designed to protect your business’s turnover and profits. If an event destroys your stock and disrupts your usual sales, a business insurance package that includes stock cover and business interruption cover will comprehensively protect your business. It would replace your stock, cover any increased costs to expedite stock replacement, and pay your ordinary expenses and profits until your stock is restored and your profit levels return to normal.

Depending on the product, insurance can be obtained if you have a dropshipping arrangement with your suppliers.

To obtain transit insurance, you will need to provide a summary of the items you’re transporting, the destinations and origins, the value of each trip, and the total amount you’d be transporting annually. Additional information may be required depending on your specific needs.

Product Recall Insurance covers the costs involved in recalling a defective or unsafe product. This policy typically protects manufacturers, but if you’re importing goods, there could be an exposure for your business. As an importer, you might be deemed the manufacturer or the first point of contact if something goes wrong. Depending on your agreement with your overseas supplier or manufacturer, this cover may need to be considered.

Generally, having a Public Liability Insurance policy of $10,000,000 and listing Amazon as an interested party will be sufficient for trading on Amazon.

Please read Amazon’s Service Agreement for more information: Amazon Service Agreement

Monthly instalments are available for your insurance policies when engaging Brindabella Insurance Brokers.

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