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Cyber Extortion Insurance


cyber extortion insurance
Protect your business with Cyber Insurance.

In an increasingly digital world, cyber threats pose a significant risk to businesses of all sizes. Cyber insurance provides coverage against data

breaches, cyber-attacks, and other cyber-related risks.


According to recent market research, cyber-attacks have been on the rise, with a 67% increase in reported incidents since last year. This highlights the urgent need for businesses to have robust cyber insurance coverage to protect their sensitive information and financial interests.


Cyber extortion is an increasingly common and costly threat to all Australian businesses. It involves the malicious targeting of businesses through ransomware attacks, data breaches, or threats to expose sensitive information unless a ransom is paid. For businesses, the consequences can be devastating, ranging from financial losses to reputational harm. Cyber extortion insurance is designed to protect organisations from these risks, offering financial and operational support in the face of such threats.


Please note that this article is general in nature. Contact an insurance broker for guidance and advice that is tailored to your business and needs. 


What is Cyber Extortion Insurance?

Cyber extortion insurance comes under the general term cyber insurance. Cyber insurance provides coverage for incidents involving digital extortion. This type of policy addresses the unique risks posed by cybercriminals who exploit vulnerabilities in an organisation’s systems to demand ransom payments. 


Coverage typically includes:

  • Ransom payments: Reimbursement for ransoms paid to regain access to encrypted data or prevent the release of sensitive information.

  • Incident response costs: Covers expenses associated with investigating and resolving the extortion incident, such as hiring cybersecurity experts and legal advisors.

  • Loss of income: Compensation for business interruption resulting from a cyber extortion attack.

  • Crisis management: Assistance with public relations efforts to mitigate reputational damage following an attack.


Please view our cyber insurance page for more information where we also cover what isn’t typically covered by this policy.


Why is Cyber Insurance Important?

Australian businesses are particularly vulnerable to cyber extortion due to the increasing sophistication of cyber attacks and the high value of business data. According to the Australian Cyber Security Centre (ACSC), ransomware attacks have surged in recent years, with organisations of all sizes being targeted. Many small businesses believe that they are immune to such attacks, but it’s important to remain vigilant and protect your business where possible as any business is a potential target. 


Key reasons businesses need cyber insurance include:

  • Rising costs: The financial impact of a ransomware attack can include ransom payments, lost revenue, and operational downtime.

  • Regulatory penalties: Failure to protect sensitive customer data can result in significant fines under Australia’s privacy laws.

  • Reputational damage: Customers and stakeholders may lose trust in a business following a publicised data breach.


What Else Does Cyber Insurance Cover?

In addition to cyber extortion, a comprehensive cyber insurance policy provides protection against a wide range of cyber risks.


Some of the key coverages include:

  • Data breach response: Covers costs associated with notifying affected customers, conducting forensic investigations, and providing credit monitoring services.

  • Network security liability: Protects against claims of negligence or failure to secure systems, which lead to data breaches or cyber attacks.

  • Business interruption: Compensates for lost income and additional expenses incurred during a system outage caused by a cyber event.

  • Cybercrime: Provides coverage for financial losses resulting from fraud, phishing attacks, or unauthorised fund transfers.

  • Legal and regulatory costs: Assists with expenses related to defending against lawsuits or meeting regulatory requirements after a cyber incident.


Who Needs Cyber Extortion Insurance?

Cyber insurance is vital for any business that relies on digital operations or handles sensitive data.


High-risk industries include:

  • Healthcare: Vulnerable due to the value of patient data.

  • Finance: Often targeted for financial gain.

  • Retail: Susceptible to attacks on payment systems.

  • Professional services: Law firms, accounting firms, consultants and other professional services are frequent targets for sensitive client information.


Even small businesses, which may assume they are not prime targets, are at significant risk due to limited cybersecurity resources.


Mitigating Cyber Risks

While cyber extortion insurance provides valuable protection, businesses should also adopt proactive measures to reduce their exposure to cyber threats. 


Best practices include:

  • Regular software updates: Ensuring all systems and software are up to date to minimise vulnerabilities.

  • Employee training: Educating staff on recognising phishing scams and other cyber threats.

  • Strong password policies: Implementing multi-factor authentication and requiring complex passwords.

  • Data backups: Maintaining secure, offline backups to restore systems without paying ransoms.


Acquiring Cyber Insurance for your Business

Cyber extortion insurance is an often overlooked yet critical component of any organisation’s risk management strategy. It not only helps businesses recover financially from cyber attacks but also provides support during highly stressful and complex incidents. Combined with strong cybersecurity practices, this insurance ensures that businesses can operate knowing that they are financially protected should their business fall victim to a cyber attack.


By investing in comprehensive cyber insurance, Australian businesses can protect their operations, reputation, and bottom line from the growing threats posed by cyber crimes.


If you’re in need of cyber insurance or would like to speak to an expert to learn more, then please contact us for an obligation free chat. 

Why Our Customers Say

Alan Biggs

Sports and Recreation

I highly recommend Warren and his team. The service I receive from them is always fast and efficient avoiding many of the problems I have had with other brokers.

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