The Insurance Council of New Zealand has marked the start of Cyber Smart Week by calling on New Zealand’s small and medium businesses to take out cyber insurance. It says only six percent of SMEs in New Zealand have cyber insurance, compared with 14 percent in Australia.
With cyber security threats on the rise worldwide, companies have begun utilising traditional risk transfer mechanisms, like insurance, to try and mitigate cost impacts if a data breach occurs.
Heartland Payment Systems figured it was in pretty good shape when it took out a $30 million cyber insurance policy. Unfortunately, the credit card transaction processor was the victim of a massive data breach in early 2009 that resulted in losses estimated at $145 million. The insurance company did pay Heartland the $30 million, but the company was on the hook for the remaining $115 million.