Why Invest In Cyber Insurance As A Small Business?

‍

If you’re wondering whether you should invest in cyber insurance to protect your business from cyberattacks, the answer is yes!

While the shift to online started years ago, COVID accelerated the adoption of online tools and the rise of remote working prompted companies to harness the power of digital technologies.  

And while digital technologies helped businesses run during this unprecedented period and have now become an integral part of businesses’ working model, they’re also exposing companies to increased cybersecurity risks.

In fact, in 2022, a ransomware attack happens every 11 seconds in Australia, with 43% of them targeting small and medium businesses!

But why invest in cyber insurance? How does it help you as a business owner?

Well, one of the best ways to protect your business against ramping cyber security threats is to invest in cyber insurance.

And to help you better understand why we’ve shared below the main reasons to invest in cyber insurance as a small Australian business. 

‍

It Provides An Extra Layer Of Protection

If you’re wondering why invest in cyber insurance when you have cyber security measures in place, the answer is that sometimes, cybersecurity policies and processes aren’t enough.

While cyber insurance doesn’t replace implementing strong cybersecurity processes and policies, it adds an extra layer of protection in case your security measures aren’t successful in preventing a cyberattack. Besides, cyber insurance policies often require businesses to adopt preventive security measures and be compliant with recognised cybersecurity standards and frameworks if they want to get coverage in the first place.

Cyber insurance can help you on many fronts, including protecting your reputation and ensuring your business survives a costly cyberattack. For instance, if your company is affected by a data breach, and you don’t have cyber insurance, your business could be liable for any stolen third-party data! 

Cyber insurance will cover you against this risk and provide highly trained third-party breach responders who can help mitigate the attack's consequences and potentially save your business and reputation.

‍

Your Business Might Not Be Able To Financially Survive A Cyberattack

This takes us to our second point.

A cyberattack costs, on average, between $200,000 and $600,000 per company. And these numbers don’t even consider the cost of business disruption caused by a cyber incident or the reputational damage and loss of clients that can ensue. If we take these costs into account, the average data breach costs Aussie businesses a staggering $3.35 million per data breach!

Now, as a small business, this could leave you no choice but to file for bankruptcy, destroying all of your hard work. In fact, research shows that 60% of Australian small businesses go bankrupt within six months of a cyber incident.

The great news is that if you're hit by a cyberattack, some cyber & liability insurance policies can cover you financially for any third-party claims, data recovery and business interruption costs and help you protect your reputation in the event of a data breach.

‍

How To Find The Best Cyber Insurance?

Now that we’ve established that cyber insurance is one of the most important tools in your arsenal to fight cyberattacks, how can you find the best cyber insurance for your company?

Well, the answer to this is that the insurance you choose needs to be highly tailored to your needs as a small business. At upcover, we specialise in protecting small businesses, independent contractors, and freelancers against various risks, including cybersecurity threats. Because we know how devastating the consequences of a cyberattack could be on your operations, we’ve tailored our cyber & liability insurance policy to protect you.

Here are some of the things covered in our policy:

• Cyber incident response: You and your business will be protected from any financial losses incurred by a cyber incident.
• Cyber extortion: If your business is the victim of cyber extortion, you’ll be reimbursed for ransom payments.
• Data and application restoration costs: After a security breach, you’ll be covered for any restoration costs directly linked to a cyber incident.  
• Cyber crime: You’ll be protected from any direct financial losses incurred by a cyberattack from a third party.
• Business interruption: If you experience an outage from security failure, you’ll be covered for any direct business interruption losses resulting from the incident.

And that’s a wrap! 

‍

We hope you now understand the main reasons to invest in cyber insurance and how beneficial it can be for your company. If you need guidance on choosing the best policy, don’t hesitate to contact us. We’d love to chat and see how we can help!

‍