"Small- and medium-sized businesses are typically easier targets for cybercriminals."
This article was produced in partnership with BizCover
Brad Miller is co-founder and General Manager at BizCover, Australia’s number one online business insurance service. His 20 plus years of IT expertise furthers BizCover’s mission of revolutionising the insurance industry.
Cyberattacks are rising worldwide, and the financial services industry is in the crosshairs. The International Monetary Fund estimates that cyber incidents caused US$10bn in industry losses between 2004 and 2023.
Given that the industry deals in high-value financial transactions and agencies store personal client information, it is no surprise that it’s one of the most targeted industries.
But while the news focuses on high-profile attacks on large corporations, self-employed mortgage brokers and small firms may have more reason to worry.
“Small- and medium-sized businesses are typically easier targets for cybercriminals because they are generally less protected against attacks,” says Brad Miller, co-founder and General Manager at online business insurance service, BizCover.
This puts mortgage brokers in the hot seat. “Mortgage brokers work in a highly targeted industry, have access to valuable financial and personal information, and are often small business owners. It’s a perfect storm of cyber risk,” says Miller.
“Cyber Liability insurance could prove invaluable to mortgage brokers, creating a critical safety net for their businesses.”
The cost-benefit of cyber insurance
Many mortgage brokers are aware of the potential dangers of cyberattacks—both financial and reputational. Still, some are hesitant to purchase additional insurance due to financial constraints.
However, with the average cost per cyber incident in Australia soaring to $46,000 for small businesses and $97,200 for medium businesses over the 2022-23 financial year, more SMEs are re-evaluating their cost-benefit analysis.
The cost of a cyberattack is significantly higher than the average monthly Cyber Liability insurance premium of $77.83* for BizCover customers providing mortgage broking services. Therefore, paying for a Cyber Liability policy may be a reasonable step for mortgage brokers looking to safeguard their business finances from cyber incidents.
“Cyber insurance is quickly becoming a ‘must-have’ policy in many industries, rather than a ‘nice-to-have’,” says Miller.
The benefits of cyber insurance
Implementing robust and up-to-date security measures remains the most effective way to protect against cyber threats, but staying ahead of criminals is a challenge for operations of all sizes.
“Large corporations potentially spend millions per year on cyber security, yet many still fall victim to an attack,” says Miller. “Small businesses simply don’t have the same resources. Cyber Insurance can create an effective safety net for them should their best efforts fail.”
BizCover’s Cyber Liability offering helps small businesses minimise legal costs and expenses related to cyber incidents.
While it varies between each policy on the platform, Cyber Liability insurance generally includes cover for expenses related to data breaches, theft or loss of client information, business interruption costs, forensic investigation, data recovery, and extortion (such as ransomware payments).
Insurers also offer optional extension covers such as Social Engineering, Contingent Business Interruption, and Cyber Fraud policies.
However, the impact of a cyberattack can extend beyond the costs listed above, and most policies are designed to help the insured respond to these further challenges.
In the immediate aftermath of a cyber incident, many small business owners are unsure who to turn to for help. Many insurers offer 24/7 incident response services to their policyholders, providing critical assistance in containing attacks and minimising their impact on the business.
Policies may also cover fines and penalties imposed for breaching Australian privacy regulations, crisis management costs to help you restore your professional reputation following an attack, and legal costs should a client take civil action against your business.
“Like many industries, financial services are becoming more dependent on technology every day,” says Miller.
“Cyber Insurance can provide mortgage brokers with valuable peace of mind, knowing their businesses are protected.”
*Customer Average Monthly Payment Amount Report is based on FY23 and presented as a guide only. It may not reflect pricing for your particular business, as individual criteria will apply. This information is general only and does not take into account your objectives, financial situation or needs. It should not be relied upon as advice. As with any insurance, cover will be subject to the terms,conditions and exclusions contained in the policy wording.
*This information is general only and does not take into account your objectives, financial situation or needs. It should not be relied upon as advice. As with any insurance, cover will be subject to the terms, conditions and exclusions contained in the policy wording.
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BizCover is an online insurance service that takes the complexity out of business insurance. Their online platform allows small business owners to easily quote and compare insurance policies from leading Australian insurers, with instant cover and no paperwork required.
Trusted by over 230,000 small businesses, BizCover is committed to making business insurance affordable and drama-free, allowing small business owners to run their business with confidence.
