According to recent statistics, over 300,000 malware programs were launched daily in 2022, and about 64% of financial businesses worldwide reported having been attacked at least once. Additionally, an average data breach costs USD$4.4 million globally, more than enough to shut down micro and small businesses.
Despite the threat of devastating losses, not all companies are protected online and offline. For instance, the Insurance Council of Australia discovered that roughly 20% of small and medium enterprises and up to 70% of large businesses are covered by cyber insurance.
Since insurance coverage requires investment, it’s only proper for firms to vet cyber insurance companies and perform due diligence before choosing the best one.
An increase in financial losses due to BEC
A rise in the average cost per cybercrime report to all Australian businesses
150,000 to 200,000
Australian homes and small businesses are vulnerable to compromise including by state actors
How to select the best insurance provider
While it’s not mandatory to purchase cyber insurance in Australia, the risks are insanely high, as with other parts of the world, and full immunity isn’t guaranteed. As such, entities can no longer rely on mandatory coverages to protect them when the inevitable happens.
However, not all incidental expenditures are covered, so you must discuss with the cyber risk insurance company you choose, to know if it’s the right one for you. Picking the best cyber insurance provider involves examining their terms and policies and ensuring that these align with your business.
Taking the following steps will help you pick the best cyber liability insurance policy and company:
Improve your cyber security infrastructure and practices
Besides industrial threats, your internal structure and cyber hygiene exercises are significant determinants of risk levels. It’s equally crucial to have a business emergency management and recovery plan.
To avoid paying high premiums, hiring expert companies is best to help you spot weaknesses and provide critical advice to improve them. Have an information technology (IT) service provider evaluate your technology assets and practices. As with other insurance types, cyber liability coverage packages are largely determined by your risks. Assessing your business risks involves both internal and external examinations.
Keep in mind that lowering your risk also reduces your insurance costs. More importantly, fortifying your online security defences is crucial as it’s a prerequisite to most insurers, who can choose which firms to cover.
Know the must-haves for cyber insurance providers
Focusing on your needs is a cost-effective exercise. But the amount you save will add up to nothing if you don’t know how to choose a reliable cyber insurance provider. Assess at least three insurance companies to ensure you get the best value for your money. Check the following elements:
- The company’s experience and track record
- Does the company cater to your industry?
- Is the firm financially healthy?
- Do they have the required permits and licenses?
- What do their former clients say?
- Are their agents knowledgeable enough to explain the policy details?
- What other insurance products are they selling?
These general questions provide you with insights into the companies’ organisational health. You can ask them in person, on the phone or online during the initial discussion.
Set an appointment
Arrange further discussions with the company representatives to understand the policy’s specifics and operations. You can discuss specific topics and find out the answers to the following:
- Is the company adequately staffed?
- Can they explain the pros and cons of each policy?
- Is the claims process clear?
- What are their claims rejection and approval rates?
- How is their customer service?
- Can they be reached easily through various channels?
- Will they be able to communicate important updates to you?
- What do you do if you have questions or complaints?
- Are there available discounts and perks?
Observe how the staff deals with you and the other customers, and if you’re satisfied with their answers.
Evaluate and understand each policy
Price may not be the only consideration in selecting a policy, but it’s crucial in determining whether you’re getting the best value for your money. Financial services giant JP Morgan Chase & Co. recommends companies to consider the policy’s financial implications.
Always study and understand the policy terms and conditions and ask questions. Read the fine print, especially the coverage inclusions and exclusions, to avoid surprises.
When it comes to cyberattacks, anyone can become a target, making cyber insurance a necessary form of business protection.
Purchasing a cyber insurance policy helps firms cushion the impact of a significant and costly attack. It protects the client’s liability to their customers in case of a data breach and reimburses the costs, primarily legal expenses, restoration activities and damage control.
However, not all policy products are the same; some may be better than others in protecting your company. The steps above should help you make an informed decision regardless of your industry, niche and model.