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Cyber policies – the cost of privacy breaches

Unless you’ve been living under a rock, or a celebrity in the South African jungle, you’ve no doubt heard the chatter on cyber policies. As they’ve been around for a number of years they’re not really the new kid on the block and most insurers and coverholders have various offerings for the market. But what of the claims …. ?

With the passing of the data breach notification laws in federal parliament recently, this legislation will come into effect within the next 12 months. It will require businesses and government agencies that fall within the ambit of the Privacy Act to notify any individuals of a data breach a la Ashley Madison.

Such a process of notification can be expensive, depending on the size of the organisation and the number of individuals affected. Realistically the costs of tracking, reporting and investigating will be onerous, particularly if that involves forensic/IT experts. In addition, there is also the potential for imposition of fines and compensation orders for the breaches.

Some commentators suggest we are only seeing the tip of the iceberg in regards to data breaches being a. discovered and b. reported. Interestingly most data breaches are caused by human error. Don’t think you ever committed a data breach? Well, have you ever lost your laptop or smartphone? That can cause privacy chaos!

Whilst anecdotally there’s been discussion surrounding the large breaches, this is the new frontier for claims and possibly, with the introduction of this legislation, we may well see claim activity in this space increase.

The other area these policies also provide cover for is a deliberate hack. This may involve the hacker accessing and releasing information from the ‘target’ and the astronomical cost of remediation after the cyber-attack.

To ensure you’re across the ins and outs cyber policies, cyber hacks and the costs involved, we are pleased to be holding a Discussion Group at Proclaim offices on the 16th of May 2017. Carter Newell will simulate a cyber-hack and step us through a hypothetical cyber-event (which will no doubt have us all running to check our own cyber security).

Please contact Proclaim to register your interest for our Cyber Policy Discussion Group.

And remember, you’re never too old to practice cyber safety!

Written by Jacqui Steffen

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