Before the introduction in March 2014 of new privacy laws that carry tough new penalties for data breaches, Fund Managers, Dealer Groups and IFA’s that store client data need to start looking at their cyber risk management processes and also consider taking out some form of Cyber cover.
Oscar Martinis the Managing Director of SMART Business Insurance advises that, financial services participants begin the process of reviewing existing procedures and policies in order to ensure compliance with the new amended privacy law well before March 2014.
Mr Martinis said, “The new Privacy Act will carry data-breach fines of $1.7 million for companies or $340,000 for individuals, further the Privacy Commissioner, has stated that he will not shy away from accepting enforceable undertakings and seeking civil penalties in the appropriate cases.”
Costs associated with data breaches can amount to many hundreds of thousands for minor breaches and in some cases millions of dollars. Mr. Martinis said that according to the Ponemon Institute’s 2013 Cost of Data Breach Study, the average cost of a data breach for Australian companies in 2012 is $3,981,784. The Ponemon Institute’s Study, also pointed out that, the cost to reinstate each record breached in Australia is on average $133, however for financial institutions that cost is $215 per record.
“This represents a significant business risk for all financial services participants, and when you factor in the new fines and penalties that can be levied by the Privacy Commissioner, then cyber risk is one business risk that cannot be ignored”.
A well thought out Cyber Insurance program should at a minimum provide for:
- Privacy Protection - third party claims from a failure to keep data secure including civil penalties
- Breach Costs – reimbursement of your own costs when a data breach occurs
- Cyber Business Interruption - Compensation for lost or reduced revenue
- Hacker Damage – Reimbursement for costs to repair, replace or restore systems and data as a result of a hack
- Cyber Extortion – Payment of ransom demands, and specialist consultant fees, where a hacker holds, or threatens to hold your website, extranet, intranet, network, programs or data to ransom
Mr Martinis provided a recent example of a Law firm with turnover of $2M and 8 staff. The firm’s server and client records were hacked and locked by Ransomware software and the firm was only able to get the files released after paying a ransom of $50,000 to hackers. Fortunately the law firm had Cyber Protection as the total cost from this incident ran to $150,000. The firm’s insurer paid $150,000 for loss of income, the ransom demand including consultant’s costs to advise on handling and negotiation of the ransom, and costs to restore the network as the hackers refused to release the files despite ransom payment.
Enquiries: Oscar Martinis – Managing Director 0414 620 324 www.smartbusinessinsurance.com.au
SMART business insurance
SMART Business Insurance: Business Insurance brokers
SMART business insurance brokers can provide business with specialist business insurance advice based on multiple quotes from leading insurance companies.
Australia's specialist business insurance broker for financial services companies
SMART Business Insurance is focused on providing smart business insurance solutions to meet specific needs of business.
SMART Business Insurance is a specialist business insurance broker.
As we act only for our clients, and not the insurer, our focus is on providing businesses with the multiple quotes and advice on suitable cover .
With access to the leading insurance companies and underwriters specialising in business insurance in Australia, we are able to source competitive quotes and suitable insurance cover for businesses.
At SMART Business Insurance, we are flexible, innovative and strive to offer businesses great value. We aim to make a complex process as easy as possible.
1300 542 573 to talk to a SMART business insurance broker
For more information or a business insurance quote email [email protected]
P: 1300 542 573