In an increasingly digital world safeguarding against cyber threats is critical no matter what the size of your business.
While the importance of cyber insurance cannot be overstated, understanding what is required to obtain the appropriate cover can feel daunting.
This blog explores what SMEs need to consider when seeking cyber insurance.
One of the first steps is to identify and evaluate the cyber risks that may compromise your business. An insurer or broker will typically ask you questions about:
If you’re unsure about how to answer these questions, consult your IT team to conduct an audit of the data you store and processes that support this. Data inventory tools can also assist in quantifying and categorising sensitive information.
Cyber insurers and brokers will evaluate your security protocols to determine your level of preparedness. Key areas of focus include:
If you haven’t implemented these measures yet, consider consulting a cybersecurity professional to establish these safeguards. Not only are these measures prerequisites for securing cyber insurance, but they also best practices for reducing the likelihood of cyber incidents.
Insurance providers will ask about any prior cyber incidents, claims, or losses your business has experienced within the past three years. They will typically want to know incidents such as:
If your business has faced such incidents, prepare detailed records outlining the nature of the event, the steps taken to resolve it, and any changes implemented to prevent recurrence. If you lack documentation, work with your legal and IT teams to reconstruct the relevant details.
Adherence to privacy laws and regulations plays a crucial role in determining insurability. A insurance proposal form may inquire about:
If you’re uncertain about your compliance standing, you may choose to consult a legal adviser or privacy consultant to conduct a compliance audit. Maintaining up-to-date policies and training employees on privacy standards are essential steps in meeting regulatory requirements.
To appropriate assess the scope of cyber insurance coverage you require, the following factors should be considered:
Consult with an insurance broker or a cyber insurance specialist who can help tailor an insurance policy to your unique needs. They can guide you through the policy wording and ensure that you’re adequately protected.
If you don’t have immediate answers to some of these questions, here’s where to start:
Obtaining cyber insurance is an essential step in protecting your business from the financial and reputational damage of cyber incidents. By thoroughly understanding your cyber risks, implementing robust security measures, and maintaining compliance with privacy laws, you’ll not only be better positioned to secure an appropriate insurance policy but also enhance the organisation’s overall cyber resilience.
When working through the complexities of cyber insurance, don’t hesitate to work closely with your IT team, an insurance broker, and external cyber specialists to ensure you’re fully prepared to answer the proposal form’s questions accurately.
Remember, cyber insurance is more than a policy; it’s an integral part of a comprehensive strategy to protect your business in the digital age.
This article has been prepared by insurance.com.au Pty Ltd (insurance.com.au) ABN 27 163 909 073, an Authorised Representative (AR Number 443422) of Insurance House Pty Ltd ABN 33 006 500 072 AFSL 240954. A copy of insurance.com.au’s Financial Services Guide (FSG) is available here.
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