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New survey data by Norton and Symantec Cyber Insurance revealed that almost one in five Australian small businesses are looking to purchase cyber insurance in 2017. Currently only 14 percent of Australian small businesses hold a cyber insurance policy, but with almost one in five Australian small businesses having experienced a cyberattack, this number is expected to increase over the next 12 months.
“Cyber insurance is an emerging trend as it presents an avenue for small businesses to become more resilient to a wide range of cyber risks and the costs associated with data breaches and business interruption. It can be a business’ safety net when all else fails,” said Mark Gorrie, Director, Norton Business Unit, Pacific region, Symantec.
The Norton survey provides some key cyber insurance findings about Australian small businesses:
- Almost one in five small businesses are looking to purchase cyber insurance in the next 12 months
Businesses with a server are much more likely to be considering cyber insurance (28 percent compared to only six percent of those without a server), as are businesses with more than five employees (33 percent compared to eight percent of businesses with one – three employees).
- Cyberattacks and loss or theft of data are key reasons for purchasing cyber insurance
Businesses with cyber insurance were asked to identify what risks they were insuring against. The Norton survey identifies cyberattacks and loss or theft of data as the key reasons identified by 28 percent and 18 percent of respondents respectively.
- Cyber insurance increased with the size of the business and the presence of a server
While only one in seven (14 percent) micro to small businesses (one – 20 employees) currently hold a cyber insurance policy, the survey revealed that results varied significantly with the size of the business. For example, smaller companies are less likely to have cyber insurance with only five percent of micro businesses (one – five employees) holding a cyber insurance policy.
Contrastingly, as business size increased, 30 percent of small business (six – 20 employees) and 23 percent of businesses with a server currently hold a cyber insurance policy. Additionally, once the business turnover reached $1 million+ or IT spend reached upwards of $6,000, the likelihood of the business owning a cyber insurance policy increased to 30 percent or more.
- The average price for cyber insurance was estimated at just under AUD$2,900
Australian small businesses who are considering cyber insurance were also asked to estimate how much they would pay for cyber insurance. On average, businesses expected to pay $2,898, but estimates varied considerably. For example, businesses with a server expected to pay more on average ($3,177 compared to only $579 for businesses without a server). Revenue was also a key differentiator with businesses earning over $1 million expecting to pay $3,983 on average compared to only $583 for businesses earning less than $250,000.
- Almost one in five business who have or had cyber insurance made a claim
Almost one in five businesses (19 percent) who currently have or have held a cyber insurance policy have made a claim.
It is important for businesses to protect themselves from cyber incidents such as privacy breach, system damage, extortion, computer virus, crime and hacking.
“Cyber security has become one of the biggest issues facing small to medium size businesses and individuals today and it’s not going away. At CGU, our role is to help our customers mitigate against potential risks that could essentially put them out of business,” said CGU National Underwriting Manager Professional Risks Najibi Bisso.
“At CGU, we understand how important it is for small businesses to protect themselves from the threat of a cyberattack and that’s why we’ve developed a CGU Cyber Defence product which provides broad coverage for customers and includes a cyber incident response service. Cyberattacks aren’t going away so, if you’re a business with a digital presence, make sure you’re protected for when an event occurs.”
“It’s not just big businesses that are being attacked by cybercriminals,” said Gorrie. “Australian businesses of all sizes are vulnerable to attacks. However, small businesses are traditionally more vulnerable because they often don’t have the same security resources and budgets as their big business counterparts.”
“The impact of a cyber attack to a small business’ brand, reputation, and business operations can be catastrophic. While many small businesses recognise the importance of proactive planning to prevent cyberattacks, the Norton survey reveals many are still unfamiliar with cyber insurance and its benefits and may not realise their normal business insurance does not cover loss as a result of cyberattacks,” added Gorrie.