A cyber insurance provider can decide not to pay a policy claim

Posted February 14th, 2019 in cyber insurance, Data Breaches, Edmund

As organisations have become increasingly dependent on technology to do business, cyber insurance has developed into one of the most important types of coverage for today's businesses to carry.

Yet, cyber insurance is also one of the least understood types of cover on the market.

This series will help clear up any misunderstandings you might have about cyber insurance and how it can protect your business.

True or false?

A cyber insurance provider can decide not to pay a policy claim

FALSEIf you're lucky, you'll never have to make an insurance claim. But if your business is involved in an unexpected cyber attack, which results in damage or loss that's covered by your policy, you can make a claim with your insurer. 

In Australia, a cyber-insurance policy is considered a general insurance policy, which is a legal contract between an insurance company (insurer) and a customer (insured).

In layman’s terms, the cover you buy is a promise of assistance when things go wrong, provided the incident falls within the policy's terms and conditions.

To ensure the insurance industry honours its obligations to its customers, the sector is governed by many laws (most importantly the Insurance Act 1973, the Insurance Contracts Act 1984 and the Corporations Act 2001).

It is also regulated by two key industry bodies: the Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission (ASIC).

These governing laws and industry regulators ensure that insurance companies behave with integrity and meet the standards set when handling customer claims.

Should you, unfortunately, suffer a cyber breach, you’ll need to lodge a claim to activate your insurer's response. If your claim is accepted, the insurer will fulfil the promise made in the policy.

However, if you have a complaint about a claim decision, your insurer is required by law to have two complaint process avenues, which you can pursue. One must be an internal complaints process, and the other must be an external dispute resolution scheme that's independent of the insurer.

Should, for any reason, you need to make a claim complaint with us, click on the link to see Edmund's Complaints Policy. There you’ll find the 2-stage disputes resolution process - firstly with Edmund, and secondly (if necessary) with External Lloyd's Australia Complaints and Disputes Process. 

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