How to deal with rising cyber premiums
Which risk do business executives fear the most? In survey after survey, the result is unanimous - cyberattacks.
In the most recent Allianz Risk Barometer, 41% of Australian respondents agreed on the top business perils for this year. These were digital incidents like breaches, IT failure and ransomware, and business interruption.
For cyber security experts, this comes as no surprise. Over the past few years, online crime has been increasingly common. Moreover, as many of us moved to remote work during the pandemic, cybercrime got significantly worse.
Since the pandemic's start, the number of ransomware attacks has skyrocketed. Now hundreds of Australian businesses have fallen victim to extortion attempts, regardless of industry and size.
The average cyber claim severity has risen to 3.15 times the 2017 average, with ransomware incidents making up 31% of claims. This has lead to a sharp increase in cyber insurance premiums, which have adjusted to accommodate the higher level of risk and cost of claims. It's expected the severity and frequency of ransomware claims will continue to go up, and as this happens, premiums will soon follow suit.
But small businesses have more than rising premiums to navigate - it's also becoming more difficult to get insured against cyber risks. As a small business, you need to demonstrate to insurers that you are taking appropriate steps to mitigate security risks and protect your IT infrastructure.
If the measures being taken are outdated, insufficient or non-existent, it will be tough to find an insurer that's willing to take on the risk.
Now most insurers expect businesses to show that they have security measures in place that are up-to-date and effective. But when small businesses don't have a dedicated in-house security team, this isn't necessarily easy.
Meeting the insurers' cyber underwriting criteria doesn't have to feel like an impossible task. Various guides are designed to help businesses navigate cyber risks, setting out practical steps to protect their IT systems.
Mitigation is a key when it comes to cyber security. For access to Cyber Insurance and risk management resources for businesses, click here.
How Coverforce can help
Not all cyber covers offer the same protection, so knowing which policy may be right for your business' specific needs can be challenging - this is where we can help.
Take proactive steps towards protecting your business' data by getting in touch with our team, who can help you determine the best cyber policy for you. Find your local Coverforce office here.
The information provided in this article is of a general nature only and has been prepared without taking into account your individual objectives, financial situation or needs. If you require advice that is tailored to your specific business or individual circumstances, please contact Coverforce directly.
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