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WHAT IS…

Cyber Insurance?

In a world reliant on real-time virtual connectivity, the internet poses significant risks to your business, relating to information technology, infrastructure and business activities.

Cyber Insurance for the construction industry is designed to protect construction businesses from a range of internet and IT risks, including cybercrime, privacy liability, media liability, hardware damage, system outages and network interruptions, all of which are increasingly becoming important risks for business owners to consider.

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Cover Benefits

What does Cyber Insurance typically Cover?

First Party Coverage

This provides cover for financial losses suffered by your business as a result of a cyber incident. This can include business interruption (loss of profits, extra expense, subsequent reputational harm and claim preparation costs) from computer system downtime, as well as the cost of regulatory investigations and fines.3 It may also include cover for payment card breaches (PCI fines), and costs to restore lost data.

Material Damage
Public and Products Liability
Incident Response

A cyber insurance policy gives your business access to an incident manager to help your business recover from an attack. This cover may also pay costs for 1) IT security and forensic services; 2) legal advice; 3) privacy breach management, including notification and identity monitoring; 4) responding to regulatory investigations; and, 5) public relations to help minimise damage to your reputation.2

Third Party (Liability) Coverage

Cyber insurance may include cover for third party liability, where a client or third party suffers a loss that you or your business are held liable for. This coverage seeks to indemnify you against loss from:

  • Privacy breaches;
  • Virus & malware transmission;
  • Unauthorised access to your or a third party’s computer system;
  • Identity theft;
  • and, Media liability.2
Material Damage
Public and Products Liability
Crime Cover

Crime Insurance may cover your business against losses from:

  • funds transfer fraud;
  • cyber extortion;
  • identity theft against your organisation; and,
  • telephone hacking.

If your customers are victims of ‘push payment fraud’ (i.e. they pay money to a party that has impersonated you), they may also be reimbursed.2

Why do I need Cyber Insurance?


As a builder, tradie or any other type of construction business you’re probably thinking, why would I need Cyber Insurance, I work in construction? Well to put it simply, if you use the internet, your business will be exposed to various cyber threats. One successful cyber-attack could be all it takes to cause significant damage to your organisation and reputation.

What would it mean for your business if you didn’t have access to some of your critical systems as a result of a cyber-attack? Imagine being unable to use your project management, accounting or estimating programs, would your business be able to cope?

A security breach could corrupt your business’ critical data, causing financial loss, reputational damage and liability to third parties. Out of the SMEs who have been targeted using malware, 40% of these cyber-attacks cost the business between $1,000 and $5,000 and for two-thirds of these businesses, these costs were unrecoverable.

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Material Damage
Broad protection for the insured works in respect of accidental damage covered events including fire, theft, water damage, Flood, malicious damage, storm and cyclone, landslip and earthquake.

Protection for your build/s throughout the entire contract period of construction.
Up to the total sum insured. Up to the total sum insured.

Existing Structures Cover
Cover that extends to protect existing dwellings when you are renovating or building and adding to an existing structure.

No need for further cover extensions to protect property on top of what’s insured in the contracted works.
Subject to the sub-limits specified in the coverage summary

Display Homes Cover
Automatic cover on display homes up to $500,000 on buildings, $50,000 for contents, and $10,000 for art during the insurance period.

Showcase your work and secure your next project with the peace of mind you need knowing you're covered whilst onsite.
Up to a total limit of $1,500,000 for the policy period.

Search & Locate Cause of Damage/Defects
Cover for costs spent to identify the cause of a defect or damage, such as discovering why a drain is blocked or identifying what’s causing water damage to internal walls.

Prevents you from having to entirely pay for discovering what’s causing something to not work properly.
Up to a limit of $50,000.

Legal Liability Claims
Cover for legal fees, settlements and court costs arising from defending a claim for third party personal injury or property damage.

Cover for legal fees, settlements and court costs you incur from defending certain claims.
Up to the limit of your liability cover including reasonable legal expenses. Up to the limit of your liability cover + reasonable legal expenses.

Public Liability & Product Liability
Protects your legal liability if you are held responsible for third party personal injury or property damage in your business activities and post-completion of the contracted works.

Covers you for your legal liabilities in relation to the contracted works during and after the job is complete.
Up to the sum insured. The choice is yours:
- $5M
- $10M
- $20M
Up to the sum insured. The choice is yours:
- $5M
- $10M
- $20M

Access to Remove & Restore Cover
Cover for costs to de-water, demolish or remove undamaged building works and gain access to allow repair.

Saves you from having to pay for the removal of part of the works to repair and continue with the build.
Up to a limit of $25,000.

Mitigation Costs
Cover for costs expended to prevent imminent Damage or mitigate the extent of further Damage, up to a limit of 5% of the contract value.

Stops you from being entirely out of pocket when it comes to preventing covered damage to insured property for your build/s.
Up to 5% of the contract value. Up to 5% of the contract value.

Subcontractor Negligence
Cover includes protection in circumstances where, due to a subcontractor’s actions on site, you are considered vicariously liable.

The peace of mind of knowing your interests are protected for your subcontractors work for which you could be vicariously liable.
Up to your liability cover limit. Up to the liability cover limit you choose.

Professional Fees
Cover for the costs of re-engaging architects, engineers, surveyors and consultants, up to 10% of the contract value.

Minimises the bill your business would have to foot if specialists needed to be brought in during a build.
Up to 10% of the contract value. Up to 10% of the contract value.

Automatic Contract Value Increase/Escalation
Where, during the construction period there is an increase in value of an insured contract, the contract value under the coverage will increase automatically.

Cover for if or when the cost goal posts shift and the contracted works is more expensive than initially insured for.
Up to 15% of the contract value as specified in the schedule. Up to 15% of the contract value as specified in the schedule.

Removal of Debris
Cover for the demolition and disposal of contract works, including the removal of debris and silt, regaining access to the site and restoring work conditions, up to 10% of the contract value.

Saves you from having to pay for the removal of debris if a covered event happens to get you back on-site fast.
Up to 10% of the contract value. Up to 10% of the contract value.

Business Premises
Cover includes protection in the event of an accident occurring at your business premises such as your office or workshop.

Cover for if accidents happen where you’re working.
Up to the liability cover limit you choose.

Materials in Storage
Cover for damage to materials to be used in the contract works that are in storage off-site but within the area specified in the contract, whilst awaiting transit to the build site.

Allows you to concentrate on the job without worrying if your off-site resources are safe until needed.
Up to the limit of the contract value. Up to the limit of the contract value.

Materials in Transit
Cover for damage to materials to be used in the contract works whilst in transit arising from fire, storm, flood, collision and/or overturning of the transportation, or by theft or malicious damage.

Cover for resources stored off-site that get damaged on the way to your build.
Up to the limit of the contract value. Up to the limit of the contract value.

Tools of Trade
On-site cover for tools used to produce the contracted works.

Cover for tools used on-site.
Available as an optional extra. Up to a limit of $20,000.



 

Frequently Asked Questions

What is Cybercrime?

Cybercrime is any cyber security incident where cybercriminals target individuals, businesses, educational institutions or government with a type of cyber threat.1 The Australian Cyber Security Centre has created a guide for common cyber threats for small businesses, which includes:

  • Malicious Software (Malware) – Unauthorised software designed to cause harm, includes viruses, spyware, trojans and worms

  • Phishing – Emails designed to trick recipients out of money and data, by perceiving to be a person, brand or company you are familiar with.

  • Ransomware – Certain malware that locks down your computer and files until a ransom is paid.

To find out more about types of cybercrime, how to prevent these crimes and how to report a cyber incident, visit the ACSC website.

Doesn’t my Business Insurance include everything I need to be covered for cyber crime?

Business Insurance generally includes two parts: liability cover and damage to property (building and/or contents). For an incident to be covered under the Property section of a Business Insurance policy, there would likely need to be damage to physical property. So, while there is limited cover for damage to hardware, the policy may not cover your data, network infrastructure, or other losses from a cyber attack. Furthermore, both liability and property covers are likely to have broad exclusions in connection with corruption, deletion, theft or inability to use Electronic Data.

There may be some coverage for cyber-related losses in other insurance policies, but many cyber losses will only be covered under a dedicated cyber policy. Many insurers are also starting to apply cyber exclusions to non-cyber policies.

How can a cyber criminal attack my business?

Cyber criminals use malware and viruses, computer and network hacking, denial of service attacks, social engineering and online scams to commit their crimes. For cyber criminals, it can be relatively easy to access computers and networks inadequately protected by virus software or passwords.

Whilst a company can put in place various controls to protect their business, a significant number of cyber incidents are caused by human error. Mistakes such as clicking on a link or opening a malicious email can be enough to allow cyber criminals unlimited access to your data and infrastructure. Furthermore, small businesses see a higher rate of malicious emails than larger companies. A growing risk for SMEs is funds transfer fraud, i.e. a fraudulent request for an employee to send funds to a scammer's bank account. Depending on the Cyber Insurance policy taken out, such losses may be covered.

Cyber incidents covered under cyber insurances are not all outsider attackers, since many policies also cover privacy or security breaches from left laptops or mobile devices, programming errors or threats from rogue employees.

How can Cyber Insurance help?

Cyber insurance can help protect your balance sheet from the costs associated with cyber losses. These can be large, particularly if personal data is breached, you lose data or suffer downtime. For small businesses, the assistance an incident response team can provide is also of particular benefit. Hiring an incident response provider can be expensive, time-consuming and might not offer the suite of services you would have with an insurer’s incident response panel to tackle the situation head on.

Have further questions?
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1Source: https://www.cyber.gov.au/acsc/report/are-you-a-victim-of-cybercrime

2Subject to the full terms, conditions, exclusions and limits of the policy.

3Cover for loss of profits and extra expense is limited to the period that computer systems are interrupted. Cover for subsequent reputational losses are also limited to a fixed period.

 
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