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Got an IT Managed Service Provider? 5 Reasons why you still need Cyber Insurance

Updated: Jun 4, 2020

There is a perception and false sense of security that your outsourced IT team can protect your business against all cyber threats. This often leads to SME businesses thinking that cyber insurance is unnecessary.

Your IT Managed Service Provider (MSP) is your first line of defence. Among other things, they monitor the activity on your network, keep anti-virus software and firewalls up to date and try to keep the bad guys out.  But with over 350,000 new malicious programs (malware) being created every day, one will slip through and wreak havoc on your system.

The most common threats to a business are ransomware, data breach and social engineering scams. In the event you are the victim of one of these threats, while your MSP may be able to assist you in some capacity, here are 5 things they won’t be able to help you with:

1. Mandatory Data Breach Notifications

Under the Mandatory Data Breach Notification Scheme, entities subject to the Privacy Act 1988 with turnover greater than $3 million or less where they are health service provider and credit providers among others must report an eligible data breach.

Examples of a data breach includes when a device containing customers’ personal information is lost or stolen; a database containing personal information is hacked; and personal information is mistakenly provided to the wrong person.

Failure to notify of a data breach or serious or repeated interference with the privacy of an individual can result in penalties of up to $2.1 million

2. Legal Costs and Expenses