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In its latest data threat report, Thales Group has revealed that almost four in 10 Australian businesses fell victim to a cyberattack last year.
Out of the 2,800 IT executives that the global tech giant surveyed from 17 countries – including 105 from Australia – an overwhelming majority stated that incidents of cybersecurity breaches remained “disturbingly high” throughout 2021.
And with the average cost of a data breach now totalling $4 million, it’s no wonder that businesses are scrambling to purchase cyber insurance policies in an attempt to mitigate the financial fallout from such attacks.
“As the frequency and cost of cyber incidents continue to rise, it’s no surprise that organisations are looking to insurance as a way to manage this risk,” said Scott McIntyre, CEO of Cyber Scope, an Australian cyber insurance broker.
“However, it’s important to remember that insurance is just one part of a broader risk management strategy, and it’s not a silver bullet that will protect you from all threats.”
According to McIntyre, there are three main types of cover that businesses should consider when taking out a cyber insurance policy:
1. First-party cover: This type of cover reimburses the business for the costs associated with repairing damage to their systems and recovering and restoring data.
2. Third-party cover: This protects the business from any legal claims third-party organisations make due to a cyber incident.
3. Business interruption cover: This cover reimburses the business for lost revenue from a cyberattack.
“It’s important to understand that no two policies are the same, and it’s crucial to read the fine print carefully before purchasing any type of insurance,” McIntyre said.
“For example, some policies may only cover certain cyber incidents, while others may exclude certain types of businesses altogether.”
Another important consideration is the excess payable on a policy, which can vary significantly from one insurer to the next.
“The excess is the amount of money that the policyholder will need to pay in case of a claim,” McIntyre said.
“Some policies have a $0 excess, while others may have an excess of several thousand dollars.”
When it comes to cyber insurance, there is no one-size-fits-all solution, and businesses must carefully assess their risks before deciding on the right policy.
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