Cyber Insurance interview with Enterprise Radio
We provided an expert interview for Enterprise Radio recently to discuss Cyber insurance.
The full interview has been transcribed below.
Introducer: You’re listening to EPN the E Podcast Network.
Welcome to Enterprise Radio, the signature show of EPN, The Entrepreneur Podcast Network, your channel for exclusive interviews with entrepreneurs, small business owners, and some of the world’s top executives who share business strategies and insights that can all help you build your business leading to your business excellence. And now broadcasting from anywhere between Brazil, South America to Los Angeles, California, it is your host Eric Dye.
Eric: This is Eric Dye. And once again, welcome to Enterprise Radio a part of EPN, The Entrepreneur Podcast Network. Today we are speaking with Mr John Catibog, the founder of Indagard Insurance Services. John has a diploma in insurance broking and Bachelors in Computer science to advice businesses on protection against data breaches with insurance. Mr Catibog, a pleasure to have you with us today on the program.
John: Thanks for having me.
Eric: And the pleasure is certainly ours. Thanks for coming out and spending a moment with us. So I’m curious what does ‘Indagard’ actually mean? Get into some of those details I’m sure there’s some great meaning behind it.
John: I thought you’d ask… Yeah, well it really is just a play on words, the words industry’ and ‘guardian’ because we specialise in business protection as insurance brokers in Melbourne.
Eric: And your play on words is quite clever, good for you. On that now commercial insurance is a competitive industry I’m sure you’re well aware of that. So what distinguishes you and indagard from other insurance brokers?
John: I’m more than happy to answer that. But before I proceed, Eric, let me just put a quick disclaimer here, that anything I say here is not advice but if you’re a business owner and you’re listening please seek professional advice regarding your unique situation. Any opinions I share are my own and not necessarily shared by the companies that I am associated with.
Most insurance brokers will provide small business Insurance, public liability, professional indemnity and cover for commercial motor vehicles. We do that too, and we actually provide more. However, as you shared that my background in Computer science, and also my experience with insurance broking allows me to thoroughly help out business owners protect against cyber risk with insurance. And this comes in particularly handy when you’re dealing with business owners who aren’t so tech savvy. And you can get into really deep discussions with technical IT businesses who need to organise cyber insurance for their operations.
Eric: Now if you would Mr Catibog tell us more about cyber risk and insurance and what type of businesses needed and why?
John: Well, I think any business that uses technologies, whether it be a laptop or a phone and handles customer information, they’re going to need it. Here are actually three big reasons why I say that.
Number one in Australia, there’s new laws, the notifiable data breaches scheme which requires certain businesses to report data breaches to the Information Commissioner so if you’re a small business, I would highly advise that you get familiar with these laws.
Secondly, cyber-crime is a growing industry, it’s a growing trend with cyber-crime damage is expected to be $6 trillion by 2021 according to one study and if you look at the the most recent headlines, companies such as like Facebook target, Equifax, these aren’t necessarily IT companies they’re being hacked and when you consider their systems they possibly invest millions in the latest technology, latest security, probably have teams of the smartest IT people monitoring the system and they’re still being hacked. [You] have to think as a small business owner who probably invests less resource are you playing the odds by not having some sort of cyber insurance.
And third and lastly, you know, as small business owners ask yourself can you afford it? The average cost of a data breach according to a Ponemon study is around $2 million. So when you consider the things such as lost time, lost money, a lot of stress and unwanted effort. But I think the big one really is the loss in customer trust. Can your business handle the damage to its reputation?
So cyber insurance really helps to cover all these risks.
Eric: It certainly does today.
We’re joined by Mr John Catibog, the founder of indagard Insurance Services, business insurance broker, located in Melbourne, Australia here on Enterprise Radio, a part of EPN, The Entrepreneur Podcast Network.
Now John tell us what the cyber insurance actually covers?
John: Well an easy way to see what cyber insurance covers is looking at it in two sections, there’s cover for you and cover for them.
So let me explain that in more detail.
Cover for you would involve cover for such things as your notification and crisis management costs. So, these are such things as your legal fees, getting into the PR team, IT forensics team to respond to a hack, is some things that are covered on the notification and crisis management.
Another cover is business interruption which will cover your loss of income while your system is down for a period of time. So it really is a critical that you look and understand that period of time that your business will be covered for loss of income.
Another cover is for data recovery, to get your systems back up and running [as it was] prior to being hacked.
And another cover for yourself as a business would be extortion. So if you decide to make any ransom payments, if that was approved by the insurer, you could make a claim for any ransoms that you pay.
An important one with this is also looking at the cover, seeing if you have some sort of social engineering, because social engineering for those who don’t know is hacking without code, so you could lose money through fraudulent means. And if you’ve got a social engineering component in your extortion cover, you could possibly claim for that.
So in the second section is cover for them. And when I say that other people, so you have things such as your third party liability, which would cover any loss or damage that a third party might suffer because their data was stolen from your system.
And then there’s also a multimedia liability which your use of multimedia which would cover things such as a libel, slander, defamation, copyright infringement. The important thing to note with multimedia liability is that it also is to check that it extends to social media activities.
Eric: Some great information and thanks for that. Now how much does Cyber Insurance costs? Give us some idea if anything else.
John: Definitely. That’s a big one that everyone wonders. Well, it depends, when underwriters are assessing your risk and determining the premium that they’ll offer you. It’s going to come down to a few things, they’re going to look at things such as your industry, the size of your business, the data that you collect, the level of security and backup that you have in place in any risk management plans and staff training that you’ve implemented, they’re all considered to determine the cost of your cyber insurance.
A good way to see this for a small business who might be budgeting for their cyber insurance, would be, for a business that’s under $10 million and they’re what you could consider ‘less risky’. For example, a chemist, a law firm, real estate agency, they can get cyber insurance cover…this is just a guide… between, $1,000 to $2,500 and you can get cover for $500,000 to $2 million worth of cover.
So when you’re looking at the investment in cyber insurance, I think cost shouldn’t really be the first thing you look at. It is important, but I think more so, it’s important to understand what you’re actually covered for. Because, I’ll give you an example with some policies that I’ve seen you could actually get it for free, but it’s a false sense of security when you dig deep and look at what you’re actually getting for free, and it’s not very much.
Eric: Mr Catibog thanks so much for your time today. A lot of super information shared prior your expertise and we can’t thank you enough. The conclusion, be curious to get your take on this. How much cyber coverage does a business need?
John: Well, that’s a hard one. Look, I have to say there is no definitive way to the determine this. But if we look at some recent studies, the Ponemon – Cost of data breach study estimates that in Australia, it’s going to cost $108 per affected record. So for example, let’s say you’re a business that has 1000 individual records, you can guess that it’s probably– you’re probably going to need $108,000 as a minimum for your cyber cover.
There’s really no definitive way to look at that. But more is better because the damages online can really be exponential. So all I can say is if have your business in Australia then give us a call, our number is 1300 3 COVER or 1-300-326-837 or visit our website and get in touch with us to determine the level of cyber insurance that you’ll need for your business.
Eric: Again John thanks for all the detail shared here today. And cyber insurances in this age is certainly very important for businesses and we thank you for the service that you offer. Again it is indagard.com.au thanks so much again John, for joining us here today on Enterprise Radio.
John: Thanks for having me Eric. Have a good day.
Eric: You as well. We’ve been speaking with Mr John Catibog the founder of Indagard Insurance Services and a business insurance broker in Melbourne, Australia and for further details visit indagard.com.au. This link will be included within the show notes of this broadcast. And again this is Eric Dye and you’ve been listening to Enterprise Radio a part of EPN, The Entrepreneur Podcast Network. Tune into our live location as we are streaming live 24/7 around the world at epodcastnetwork.comforward/live. You can also find our live stream on iTunes radio and tune in radio as well as the tune in radio app for your listening convenience. And as always, we thank you for your support and for tuning in.
Introducer: Thanks again for listening to Enterprise Radio here on The Entrepreneur Podcast Network. To subscribe for future programming, simply visit epodcastnetwork.com.