Strata managers have a crucial role in overseeing strata properties on behalf of owners. As technology becomes essential for storing and sharing information efficiently, it is increasingly important for strata managers to consider cyber policies to help protect the personal information of residents in the properties they manage. This article unpacks the advantages of cyber insurance for strata managers and offers strategies to minimise vulnerabilities and the potential risk of cyber attacks.
In Australia, cyber incidents come with significant financial burdens for businesses, with an incident costing small businesses an average of $39,000 and $88,000 for medium-sized businesses (ACSC, 2022). To help limit this impact, businesses turn to cyber insurance policies, which offer coverage for losses and liabilities stemming from cyber-attacks and data breaches. These policies help cover expenses related to cyber incidents, such as legal fees, data recovery costs, notification expenses, public relations efforts, and potential financial losses arising from business interruption or identity theft. For strata managers, having a cyber policy in place can offer several benefits:
Strata managers often handle residents’ sensitive personal information, such as contact details and financial records. A cyber policy can provide coverage for the costs associated with a data breach, including forensic investigations, notifying affected parties, and credit monitoring services.
If a cyber incident leads to legal actions against the strata manager, a cyber policy can help cover legal defence costs and settlements. For example, if a strata management company is the target of a cyber attack where personal information is accessed, stakeholders can take legal action against the strata manager and the policy will typically respond to defence and settlement costs if they are deemed liable.
Ransomware attacks involve malicious software that encrypts data and demands a ransom for its release. Strata managers may be targeted by ransomware, which can disrupt their operations and compromise the security of residents' personal data. If a strata manager falls victim to a ransomware attack, a cyber policy can cover the costs associated with ransom payments, data recovery, and business interruption.
- Phishing and Social Engineering
Phishing attacks involve fraudulent emails or messages that trick individuals into revealing sensitive information or transferring funds. Strata managers may receive phishing emails impersonating residents, contractors, or other relevant parties. If the strata manager inadvertently falls victim to a phishing scam and suffers financial losses, a cyber policy can help cover those losses.
5 Ways to Proactively Manage Cyber Threats
A cyber insurance policy is only part of the solution to tackling cyber threats. Proactive risk management is crucial for strata managers to help limit cyber risks. Here are some key steps to get you started:
- Conduct a Risk Assessment
Start with a thorough risk assessment of your strata management company's digital systems, processes, and assets. Identify any vulnerabilities, threats, and understand the potential impact of a cyber incident. This assessment will help you identify your specific risks and prioritise your risk management efforts.
- Develop a Cybersecurity Policy
Establish a clear and robust cybersecurity policy that outlines security guidelines, procedures, and best practices for your organisation. This policy should cover areas such as password management, access controls, data handling and storage, software updates, employee training, incident response procedures, and vendor management.
- Educate and Train Staff
Cybersecurity awareness and training are crucial for all employees. Conduct regular training sessions to educate staff about common cyber threats, phishing attacks, social engineering techniques, and the importance of adhering to security policies and procedures. Don’t forget about remote workers either. Encourage employees to report any suspicious activities promptly.
- Implement Strong Access Controls
Limit access to sensitive systems, databases, and resident information to authorised personnel only. Enforce the principle of least privilege, where employees are granted the minimum level of access required to perform their job functions. Implement strong password policies, multi-factor authentication, and regular access reviews to ensure that only authorised individuals have access to critical resources.
- Backup and Disaster Recovery
Regularly back up critical data and systems to secure and offsite locations. Test the restoration process to ensure data integrity and quick recovery in the event of a cyber incident. Having robust backup and disaster recovery mechanisms in place can help lessen the impact of ransomware attacks and other data loss scenarios.
With you all the way
Please reach out to Honan to discuss your unique Cyber Insurance needs at any time.