Does my business need Cyber Insurance?

Technical security (firewalls and MFA) is the first line of defence, but Cyber Insurance is your financial safety net when those defences fail.

1. What a Standard Policy Misses

Many business owners assume their ‘Public Liability’ or ‘Professional Indemnity’ insurance covers them for a hack. In reality, most modern policies have specific “Cyber Exclusions.” Without a dedicated Cyber policy, you are personally responsible for the costs of a breach.

2. The Legal Costs of a Breach

If you are hacked, your legal obligations begin immediately under the NDB scheme. Cyber insurance typically pays for:

• Privacy Lawyers: Specialized legal counsel to determine if you must notify the OAIC.
• Forensic IT: Specialists to find out what data was stolen and stop the bleeding.
• Notification Costs: The postage, call centre, and credit monitoring costs for thousands of affected customers.
• Regulatory Fines: In some instances, the policy may cover defence costs for ACCC or OAIC investigations.

3. The ‘Condition Precedent’ Trap

Be careful: most insurance policies require you to have certain security measures (like 2FA) in place before a breach occurs. If you claim a loss but didn’t follow your own security policy, the insurer may decline the claim.

Related Topics

• Managing AI Risks
• Cybersecurity Policies
• Directors’ Duties

Protect Your Liability

We work with insurance brokers to ensure our clients’ internal IT policies are robust enough to satisfy the strict requirements of cyber insurance underwriters.

Concerned about coverage? Contact Bell & Senior today. Call (07) 5532 8777.