Is it time to update your business’s data privacy and cyber security?

Lisa Carter, Director - Clear Insurance

You might not believe it will happen to your business, but recently I received a call from a very stressed and worried client, who had essentially lost $19,000 to a phony invoice. This hoax invoice was designed to look like my client’s invoices and was paid by their customer, who lost their money and now can’t afford to pay my client their $19,000.

New government legislation

Amendments to the Federal Privacy Act in February 2018 means that most businesses will have to notify data breaches to the OAIC and every individual impacted by this breach. If your business operates under the Privacy Act or has an annual turnover greater than $3M, then these amendments apply to your business.

How can a data breach affect your business?

As in the case of my client above, your business can lose large amounts of money due to a successful cyber attack. My client now has to not only deal with the data breach, but also has to set in place a cyber security management and response plan and try to repair the damage caused to their reputation by this hoax invoice.

This type of data breach and access to customer’s private information can also lead to third party litigation, another financial cost that can devastate small businesses who don’t have sufficient resources to overcome a lengthy court case.

Not forgetting that if the data breach was extensive, the operation of your business could also be interrupted, resulting in significant on-going financial losses. Then there are the costs involved in tracking down the full extent of the data loss, rectifying the situation and even paying fines that can reach up to $1.8M for organisations that breach or do not comply with the new legislative amendments.

How can you protect your business from cyber attacks?

You must manage your cyber risk correctly and protect your business with Cyber Insurance. These two steps don’t guarantee that your business won’t suffer a cyber attack, but they will mitigate your exposure, minimise the damage and ensure that your business can financially weather the storm and subsequent reputational damage from a cyber attack.

If you would like any further advice, please contact Lisa Carter on (07) 3174 5013 or email lisa.carter@clearinsurance.com.au.