The case for cyber insurance

Being cyber aware and needing to protect your business against cyber-attacks is a modern reality.

Ransomware is the most reported form of cyber incident. It’s a type of computer virus that prevents users from accessing their data and then threatens permanent encryption or deletion of that data if a ransom is not paid. Most ransomware is spread hidden within Word documents, PDFs and other files normally sent via email.

On Wednesday this week the world experienced another major incident with a ransomware attack on a large number of international business. The attack was in the form of computer viruses so new, traditional Anti-Virus protections are not 100% effective on them

How can your business be impacted?

If an unsuspecting employee opens a contaminated email the virus can potentially spread through your network making your data unusable. This means down time for your business which in turns means losses. Not to mention if your data is permanently affected.

Research shows 40% of spam in 2016 had a document or web link that activated ransomware. With the increase in ransomware, businesses need to make sure they are protected against potential attacks that could ultimately cost them dearly.

An example of a ransomware attack

On Friday 12 May 2017, the biggest online extortion attempt took place causing havoc to over 200,000 computers across 150 countries.

By the following Monday morning, it was confirmed that businesses in Australia had also fallen victim to the ransomware attack as companies across the globe scrambled to update their cyber security.

The impact of the attack was widespread. Emergency departments in the UK turned away patients, the Renault auto plant in France shut down for days, train ticket vending machines in Germany stopped working, FedEx operations stalled, PetroChina’s electronic payment capabilities were compromised, telcos in Spain (Telefónica) and Russia (Megafon) were disrupted.

Worryingly, Microsoft had issued a patch for affected versions of Windows after the hackers’ earlier extortion attempt in February 2017. Installing the patch would have stopped thousands of computers being compromised.

How can you protect your business?

  • Be cyber protected: ensure your business regularly backs up its data
  • Install the latest security patches. Failing to do this is common amongst Australian businesses
  • Have internal procedures in place to protect your business
  • Consider cyber insurance even for small businesses

Be aware though a cyber insurance policy could be void if the insurer determines the loss can be attributed to the policyholder’s lax risk management strategy within their business.

Contact your local Phoenix Insurance Broker today to talk about cyber insurance options for your business. We can help with a complete risk mitigation strategy – from risk assessment, basic security measures (cyber security training, efficient backup procedures and data restoration plans), and transfer of risk (the right insurance policies) to business continuity and disaster planning including reputation management, professional indemnity and data breach obligations.

Please contact Phoenix Insurance Brokers today to discuss your Insurance needs.