Strata Cybercrime Protection

With cybercrime dominating the news at the moment, we look at what the exposures are for strata and what best practices strata committees can adopt to protect themselves.

As Hutch is the first insurer to offer cyber cover within a strata policy, we’re all about protecting our clients from losses.

Exposures

There’s no doubt that cyber crime is on the increase in Australia. The heavily publicised Optus data breach is the just the tip of the iceberg. The government estimates almost 3M Australians fall victim to cybercrime annually, for a loss of $3.9B.

Eden Winokur, Cyber Partner at leading law firm Hall & Wilcox, suggests that for strata, cyber exposures are a real risk:

“Social engineering fraud, or invoice scams, are significantly impacting Australians. We’ve seen first hand the suffering these sorts of payment redirection scams cause. Someone receives an invoice from a supplier, with new bank details. They know and trust the supplier, and the email looks ok, so they go ahead and make the payment to the new account. A few weeks later, the supplier chases up the payment, and they discover that that invoice was fraudulent and sent by a cyber criminal”.

The government’s Scamwatch report suggests that this sort of payment redirection scam is dramatically increasing, up 77% in 2021, for $227m of reported losses, and Strata should be particularly vigilant, as “Scamwatch data shows that small and micro businesses lost the most money to scams last year,” according to ACCC Deputy Chair Mick Keogh.

Protection

What steps can stratas take to protect themselves?

“There are numerous steps committees can take to protect themselves from cybercrime” says Mr Winokur, and we’ve summarised some of them below:

1. Call to verify new bank details with any new supplier or when bank details are changed by existing suppliers. Make sure you confirm the changes with someone you know.
2. Protect personal information with multi-factor authentication, strong password policies, encryption, firewalls, anti-virus and patch vulnerabilities. Both Apple and Microsoft enable you to encrypt your hard drives.
3. Make all bank accounts dual signatory.
4. Keep up to date with the types of cyber risks that can impact your business operations.
5. Read the government’s small business guidelines at cyber.gov.au and take the time to brief the committee on best practices.

Insurance

Hutch Underwriting is the first insurer to offer cyber cover within our Strata policy. We offer limits of up to $25,000 at reasonable pricing. We cover loss of funds as a result of cybercrime, coverage that is specifically designed for social engineering fraud that is so prevalent at the moment, and defence costs for liability claims resulting from loss of personal information in a cyber breach. Please contact your broker for more information.