Australian organisations are encouraged to review their business insurance policy to ensure they are protected from cyber threats this year.
The call comes from the National Insurance Brokers Association after news broke of a massive data breach that affected more than 70 million customers of US retailing giant Target.
Cyber thieves managed to steal the credit card and identify information of the majority of Target’s customers during the busy holiday season.
This breach – and the negative publicity that resulted – has forced Target to reduce its earnings estimate for the fourth quarter of 2013, citing ‘meaningfully weaker-than-expected-sales’.
Fortunately, consumers Down Under were not affected as the US Target company works as a separate entity to Target in Australia.
Cleaning up the breach is expected to cost millions of dollars. This includes paying liabilities to credit card providers for reimbursements of fraud payouts and card re-issuance costs, liabilities from civil litigation and expenses for legal, investigative and consulting fees.
Additionally, Target announced they will be offering one year of free credit card monitoring and identity theft protection to all guests who shopped in their US stores during the cyber breach attack.
While Target, as a large-scale enterprise, can recover from these significant costs, smaller businesses often struggle to resume operations when legal expenses and liabilities occur.
It is therefore important to ensure your current insurance policies will protect your business if you are found liable for losses caused during a cyber crime.
Organisations are also at risk of losing important information and data, which could significant delay the process of getting back online and operational after a loss-causing incident.
For more information on cyber theft cover and business insurance, contact the team at MGA Insurance today.