Cybercrime: what insurers need to know

By Dan Weis, Security Specialist and Lead Penetration Tester, Kiandra IT | 25 Aug 2016
  • Claims
  • General Insurance
  • Risk Management
Cyber Crime Premium

The Ashley Madison breach exposed 37 million curious (or active) users looking for an affair, hacking attacks on the Democratic National Committee in the US have made Donald Trump seem an almost plausible Presidential candidate, eBay had the personal details of 145 million users stolen, and these are just a small sample of the very highest profile cybercrimes in the last two years.

In 2015 alone there were more than 700 million breached records, half a billion variants of malware detected and more than 10 million web attacks each month – and they are just the ones we know about.

And don’t think that a malicious cyber-attack is just in the realms of the high profile and the mega-corporation. The fact is the majority of hacks that happen to smaller national and local businesses are not reported. The 2015 Ponemon Institute Cost of Cybercrime study shows that on average cybercrime costs an Australian organisation anywhere from $792,932 - $18,000,000 per breach, with the average cost for a business at $2.5 million. Australia is currently ranked the third highest globally for malicious URLs/phishing attacks, and the fourth globally for the number of botnet infections.

If it wasn’t obvious before it is now - it isn’t a matter of will your business be hacked, but when. 

Like any risk there are both practical and financial ways to deal with this and the insurance industry is providing more and more options for cyber-attacks as the problem escalates, but it remains woefully behind the progress of this morphing criminal threat.

In many instances cyber insurance policies are the only way an organisation will recover in the event of a breach, certainly the only way they can protect themselves against the protracted interruption to their business. In addition, they can be a much cheaper alternative for accessing specialist services during, or post breach than paying for remediation outright, after-the-fact.
 
The range of services and coverage that are typically included in a policy are:


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