Why your business needs ransomware insurance

Ransomware remains one of the most disruptive cyber threats facing Australian businesses. The Australian Signals Directorate's Australian Cyber Security Centre received over 84,700 cybercrime reports in FY2024–25 — an average of one every six minutes, leaving many Australian businesses feeling exposed. A ransomware attack can bring operations to a halt, drain finances, and put sensitive data at risk. When your system gets taken over by ransomware, your business is held hostage.

A cyber insurance policy that covers you in the event of ransomware is a must for all businesses. Read on to learn about why your small business needs this type of tech insurance.

How ransomware works

Ransomware encrypts your files or locks your systems, then demands payment before access is restored. It's typically installed through deceptive links — delivered via phishing emails, calendar invitations, instant messages, or compromised websites — meaning it often only takes one careless click to bring a business to a standstill.

Protecting Your Business

There are steps you can take to protect your business from an attack, but without ransomware insurance, there is still a high risk. Along with getting the proper business insurance, you can do the following:

• Update Software Regularly
• Never open unsolicited emails
• Backup data regularly
• Restrict software privileges within the workplace
• Enable spam filters
• Use firewalls to block suspicious content
• Use strong passwords and multi-factor authentication
• Scan all emails for threats

Even with strong security practices in place, breaches can still happen — which is why insurance remains an essential backstop, not just a precaution for the unprepared.

Cyber Insurance

Cyber insurance can cover expenses and other financial losses due to a cyber event like malware attacks, cyber extortion, social engineering, or other invasive software.

A cyber policy typically covers three things, even though the policy may be broad. With a policy, you get covered for Liability (regulatory defence and privacy lawsuits), Internal Financial Loss (notification expenses, business interruption, extortion, data recovering, and crime/theft), and Emergency Incident Response (covering costs that were lost due to a cyber event).

Typically, a main coverage cyber policy includes:

• Privacy Breach Notification & Crisis Management Costs
• Privacy & Security Liability
• Business Interruption – Loss of Profits & Operational Expenses
• Data Recovery & System Damage
• Regulatory Defence and Fine
• Media Liability

Additionally, you can enjoy other coverages by paying an extra premium including:

• Social Engineering & Funds Transfer Fraud
• Payment Card Data Security Liability

Talk to Covercorp about cyber protection

Ransomware insurance is a core part of managing cyber risk for any business, and small businesses are increasingly targeted. Strong security practices reduce your exposure, but the right cover is what ensures your business can recover if an attack still gets through. Our brokers can review your current insurance program and help tailor cyber protection to the risks specific to your business.