Retailers need Cyber Risks Cover

An article on the Lloyd’s of London web site notes that while millions of people have been out an about shopping this holiday season, “an increasing number are choosing to shop from the comfort of their homes – and offices – using the internet.” However, the “growth in internet shopping brings new risks for retailers.”

There is “cyber and payment fraud insurance” that can protect companies during critical trading periods like Christmas.”

It is likely we will see a general trend towards more online transactions as more and more consumers turn to the internet to find products and make purchases. We have seen internet sales grow substantially as consumers go in search of better promotions.

2011 has not been a good year for Australian retailers and it appears to be a worldwide trend.  Increasing internet purchases can have even greater implications for retailers.

As sales volumes rise, potential problems can increase. The spokeswoman also noted that “last Christmas the delivery of internet orders was affected by flood and cyclonic conditions. But retailers have learned the lessons of last year’s bad weather and have developed ‘click and collect’ which allows customers to pick up their goods from a nearby store.”

The move to online shopping presents retailers with a host of new risks, There is a risk of network outage or downtime during a busy trading period, with potentially disastrous consequences for a company’s finances and reputation.

Traditional property insurance will not cover internet downtime. However, specialist cyber insurance can protect against some non-physical damage losses triggered by a virus or a hacking.

An emerging and increasingly important risk for retailers is protecting their customers’ data.

Lloyd’s have highlighted the recent number of instances when retailers have suffered “costly data breaches, often involving consumers’ sensitive credit card information. Earlier this year, electronics firm Sony suffered a major breach that is expected to cost the company $1 billion.”

Cyber privacy and security is a big issue for retailers as they increasingly move online and as they hold more sensitive information on customers such as credit card details.

Cyber insurance provides retailers and other companies that hold sensitive personal data with cover in three main areas.

  1. the cost of responding to a breach,
  2. fund the expense of dealing with regulatory investigations and
  3. defending civil litigation.

Insurers recently expanded cover to include the risk of falling foul of data security standards set by the big credit card transaction companies.

Most retailers in the US now are purchasing specialist cyber insurance, as “tough data protection laws in the US make dealing with a data breach very costly. And evolving data protection laws and a growing awareness of the reputational damage of a major data breach are likely to lead to more retailers buying cyber cover in Europe.

He also noted that “regulation tends to drive the purchasing of data breach insurance, and as European rules get tougher we will see a flurry of interest in cyber insurance from retailers and other sectors that handle personal data

It is likely Australia will follow in the same way.

Turning to the ever present problem of dealing with hackers, A large data breach of customer credit card details could prove costly, both financially and for a retailer’s reputation.

As the average transaction value increases, it gives cyber criminals and fraudsters more opportunity and increases the potential severity of the consequences.

Insurers are able to adapt cover to respond to busy periods like Christmas. For example, insurers can provide higher limits at peak times.

Cyber attacks were ranked as the twelfth most concerning risk by 500 business leaders in Lloyd’s Risk Index 2011. The survey, carried out by the Economist Intelligence Unit, was described by Richard Ward, Lloyd’s Chief Executive, as a “snapshot of two years of economic and political turmoil”. Find out more about the findings in Lloyd’s Risk Index 2011.

Source: Lloyd’s of London

  

Latest News

CPR joins Ausure

We would like to announce to all our Clients, Prospective Clients, Suppliers and Insurers, that Cooper Professional Risks Pty Ltd trading as CPR Insurance Services, will be leaving National Adviser Services Pty Ltd (NAS) and joining Ausure Pty Ltd as a Corporate Authorised Representative from 5 March 2018.

Fundamentally, there is no difference to you, except our Invoices will look a little different, and the Banking details will be in a different name and account number. Everything else at CPR stays the same.

There are a number of reasons we have made this decision, but the primary reason is for what we believe is best for our clients.

read more

Special offer to CPR Insurance clients

Employsure are providing a FREE Business Health Check to all our clients and gives you the opportunity to receive an analysis of the health and safety requirements in your workplace. Also. Employsure  will review your employment agreements as well as your wage rates helping you to avoid workplace claims.

Ordinarily this would cost you at least $1,250 but because you are a CPR Insurance client, it is free!

It involves the following review for you.

SAFECHECK

A specialist Work Health and Safety Consultant will visit your workplace and carry out:

A review of your business’ current work health and safety policies, procedures and systems to identify areas of concern or non-compliance

Following the review, you will receive a report summarising the findings and the health and safety

Status of your workplace

WAGE CHECK

A Wages Adviser will review your rates of pay and produce a Wage Check report.

The review will be conducted against the industrial instrument applicable

A report will be supplied advising if the wages are compliant and what steps to take to achieve compliance

CONTRACT REVIEW

A Document Consultant will review an employment agreement and provide recommendations.

The review will highlight compliance issues with the Fair Work Act 2009 as well as best practice

The report will make recommendations to achieve compliance and provide protection to your business.

This will remove any areas of potential dispute and risk

So what do you have to lose? Contact us on 07 3123 1137 and arrange 

read more