In the digital age, protecting yours and your customers’ data is of the utmost importance, especially if you deal with personal data like home addresses and contact numbers. Data breaches are on the rise in Australia, with thousands of breaches reported each year, meaning your business is at risk of having a cybersecurity incident.

The most notable data breach from the past few years was the Medibank breach that saw 9.7 million people’s personal details leaked to a well known ransomware group, highlighting the importance of cyber liability insurance. It is crucial for sole traders and small businesses to protect themselves and their business against unexpected financial risks surrounding cyberattacks.

What is Cyber Liability Insurance and What Does it Cover?

Cyber liability insurance offers a level of financial protection in the case of a cyber security breach. For instance, if a data leak does happen then the business will be liable for incident response, remediation, brand damage, litigation, compliance fines, and any customer damages.

Alternatively if ransomware or hackers wipe any data or lock you out of your system, cyber liability insurance could help reimburse you for any costs associated with the potential damage to your computer system or loss in business. Cyber insurance policies help reduce the costs of the fallout.

There are a handful of ways businesses get hacked:

• Viruses: These are a type of malicious code or programme written into how a computer operates, intended to spread from computer to computer and give hackers the ability to destroy computer systems.
• UI redress attacks: Known also as clickjacking, is when a hacker tricks a user into clicking a button they didn’t intend to so they download malware, viruses, transfer money, or purchase false products online.
• Cookie theft: This is when hackers get access to cookie data and can get information like addresses, phone numbers, and other sensitive information.
• Distributed denial-of-service (DDoS) attacks: These kinds of attacks are done by flooding an online server with internet traffic to try and stop users from accessing the services and sites.
• Domain name system (DNS) spoofing: Hackers do this by changing the domain name of a website so that any users are redirected to a fraudulent website that could steal the users information.
• Social engineering: Social engineering is the use of deception to try and manipulate someone into disclosing confidential or personal information for fraud. The most common type of social engineering is phishing, where an email has a link that downloads harmful software or redirects to a malicious website when clicked.
• Missing security patches: Security patches are updates your computer needs to install so your computer is safe and protected from hackers. When a security patch is missing, leaving your computer open to cyberattacks.
• Malware injections: Malware is an umbrella term for different programmes installed on computers and mobile devices with the intention of causing harm and finding data for financial gain. The most common type of malware injection is an SQL infection, where a hacker uses malicious code to manipulate a database into revealing information.
• Password cracking: This one is simple, with a simple solution. Also known as password hacking, it is the process of using a programme to guess a password that is protecting a system.

Why do Sole Traders Need Cyber Liability Insurance?

Cyberattacks could happen to anyone, which is why it is best to be prepared for the fallout of a potential data breach. In 2024, business-targeted cybercrimes have been witnessed every 7 minutes in Australia. The ACSC itself has 77,600 reported cases of cybercrime, that’s a 15% increase on previous year. Cyberattacks cost Australian businesses a total of $33 billion annually.

All of these reasons and more are why sole traders need a cyber liability insurance policy. When it comes to cyber security, there is no such thing as IF, but WHEN.

What Can Cyber Liability Insurance Cover?

This largely depends on the insurance company. Not all companies are the same, which is why it helps to talk to an insurance broker for your insurance needs. A cyber liability insurance policy can cover:

• Cyber extortion
• Cyber espionage
• Denial of service
• Card skimming
• Crimeware
• Hacking

Why use Morgan Insurance Brokers?

When it comes to protecting your customers data and information, it is crucial to get cyber liability insurance so you are covered for any unexpected attacks. As with many things, insurance is there to help, but Morgan Insurance Brokers are there to help you. We are dedicated to getting you the best insurance protection possible for you to run your business stress-free.

Don’t let a cyberattack crash your business, contact us today as your next cyber liability insurance broker and get one step closer to safeguarding your future.