cyber insurance

Facing the latest impacts of cyber-crime

As Australian businesses are once again forced to adjust to a new normal, a new form of problem is brewing beneath the surface.

Although cybercrime is not new, the current increase in cyber attacks, as well as the severity of these attacks, means that companies can no longer simply ignore this very genuine threat. This is the high time to invest in Cyber Liability Insurance

Large spikes in cyber crime have had a substantial influence on the cyber insurance market as well, resulting in an increase in the number of claims, driving up Cyber Insurance premiums and forcing insurers to limit coverage in some sectors.

The current cyber landscape

While cyber crime increased dramatically during COVID-19, the reality is that businesses have been vulnerable to attacks for many years.

Not only is cybercrime on the rise, but one type of cyberattack in particular has witnessed a spike in recent months: ransomware attacks. The quantity and variety of ransomware attacks skyrocketed in 2020. In the last year, ransomware assaults on Australian businesses have increased by 60%, prompting experts to call the problem a “tsunami of cyber crime.”

There is growing worry that Australian businesses have been paying ransom to hackers in the millions of dollars, creating a vicious cycle of criminal behaviour.

How a cyber-attack could affect your business?

Monetary losses – from theft of money, information, and business interruption; 

Reputational loss – from damage to other firms you rely on to do business; and 

Business loss – from damage to reputation and other companies you rely on to conduct business costs – time for alerting the appropriate authorities and institutions of the occurrence – getting your affected systems up and running investment loss

What does this signify for business’s cyber insurance policies?

The cyber insurance business has been significantly impacted by the exponential rise in ransomware assaults.

Cyber insurance renewal prices are increasing by up to 40% for some firms. While hikes in insurance premiums are frequently a bitter pill to chew, the high rise in cyber insurance prices is unavoidable in the current climate of rising cybercrime.

Because premiums are based on the chance of a firm having to file a claim, the insurance market has raised premiums as a consequence of global rise in claims activity induced by rising cyber-crime.

In addition, insurers have chosen to limit coverage in a portfolio if a company cannot demonstrate that it has implemented proper cyber security measures.

Strengthening your defence

Companies and top management must prioritise business readiness and having risk measures in place to mitigate the risk of a cyber crime in the present climate.

While higher premiums may cause some organisations to reconsider their cyber coverage, compromising on this protection could result in significant financial consequences if your company is a victim of cybercrime.

Because ransomware assaults are covered by Cyber Insurance, self-insuring in this environment may result in your company having to pay huge amounts in ransom later on.

Engaging your insurance broker as soon as possible, even if you already have cyber insurance with an upcoming renewal, will assist you understand what measures you need to do to be insurable and receive coverage.

Reputed brokers can provide consultancy services and do a thorough analysis of your organisation to provide risk mitigation techniques. This will not only help you show your company to the insurance market in a better light, but it will also give you time to implement proper mitigation methods, which will improve the coverage and premium your company receives.

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