Cyber risks increasing for firms

A few weeks ago, the site Ashley Madison was hacked and its thousands of users' personal information, including credit card details, were compromised. Cyber risk is increasing not just with large firms, but also with smaller firms. It may be worth considering business insurance to protect your SME if its systems get breached in the future.

With businesses becoming more and more reliant on technology and the internet, they are exposing themselves to higher chances of malware and other malicious software attacking them.

This needs to be understood by all businesses, regardless of size.

On the upside, Deloitte has found that a data breach policy was in place in over two-thirds of organisations in its Australian Privacy Index 2015.

With the ever-changing landscape of cyberspace, a paper from law firm Allens saying that many CEOs are unaware that the business protection and property cover they currently have is not sufficient.

The other problem is that business property insurance can only cover damage to tangible items, so loss of data because of a hacker may not be covered. In addition to this, even if tangible property is defined to be inclusive of electronic data, IT hazards may be explicitly excluded from policies.

"Many property damage insurance policies contain general exclusions for losses in any way connected with the destruction, distortion, or misuse or misappropriation of electronic data, or a failure to send or receive electronic data, unless it is caused by a peril such as fire or flood or the theft of the physical computer hardware," said Allens.

Therefore, it is worth talking to your insurance provider about making sure your SME has a safety net should you be targeted next.