August 18, 2020

Cyber Insurance: Q&A With Geoff Boyle

Between a thriving insurance practice, seven children, and his work as a local church pastor, Geoff Boyle is a very busy man.

We recently asked Geoff about cyber insurance in the COVID-19 era and other issues facing his industry and clients today.

Hello Geoff! You’re a well known Toowoomba local, but how did you come to live here?

I was posted to the Army Barracks at Cabarlah in 1984. I met my wife-to-be at a small Pentecostal Church in Toowoomba later that year. We moved around the state but eventually settled down in Toowoomba and I have been a local very happily for the past 20-plus years. Ten years ago, I became the Pastor of that same small Pentecostal Church, Toowoomba Revival Fellowship.

Tell us about your family?

My wife Julie and I have been married for over 36 years. We have seven children – two boys and five girls ranging in age from five to 35. Our two older children, Jemma and Jeremy, both worked in the family business for 12 years each, but now live in Sydney and London respectively – both have pursued insurance careers. The younger five children are at various schools in the area.

PMA Insurance is a family values-based business with a strong focus on relationships. Why are relationships so important in an insurance business?

We pride ourselves on our supportive and inclusive relationships within the office. This encourages our staff to pursue rapport building and meaningful relationships with our clients, insurers and other providers. All of our relationships are critical to our longevity and engagement in business. These solid trusted relationship bonds allow us to gain better outcomes for our clients in terms of cover, claims and cost.

Photo from PMA Facebook Page

What are some of the biggest insurance issues facing your clients today?

One of the major issues currently is the recent increases across the board in insurance premiums. 2019 was the year of bushfires and hail storms across Australia. Insurers paid claims in the vicinity of $7 billion in these two categories alone.

In 2020, it is the impact of COVID-19, culminating in business closures or profound reduction in turnover and significant job losses across many sectors. Insurers, like any other business, strive to maintain their profitability, so in order to remain viable they have increased premiums at exactly the same time as the general population is wanting to reduce their spending.

Small Business is a big focus for PMA Insurance. What are the key insurance areas SMEs need to be thinking about right now?

Never before has it been more important to be reviewing your insurance with your trusted adviser. A review of your insurance coverage should include asset values, the relationship between premium and excess options, Business Interruption coverage in the COVID-19 landscape, plus the availability of “newer” insurances, such as Management Liability and Cyber Insurance.

Tell us more about Cyber Insurance in the COVID-19 era?

Because this type of insurance is relatively new in Australia, a lot of business owners are unaware of its importance and current relevance. Cyber criminals keep abreast of the measures that IT companies and businesses design and implement to try to protect IT operations, business interactions and finance transactions. There has been an increase in successful hacking and consequent business losses during the COVID-19 period due to a very large increase in employees working from home. The hackers have been given a windfall with lesser security settings in some home setups. The most important things for a business owner are to purchase a top-quality Cyber Insurance policy and make sure your back up system is robust and fully functioning at all times.

Can you give us an example of a cyber claim?

A manufacturing client of ours held a Cyber Policy and had an IT system that was professionally set up and maintained. The company had a Chief Financial Officer who was aware of emerging trends in risk and, in particular, IT risk. As such, they implemented policies to ensure that bank account details held for suppliers, vendors and customers were only altered with written authority from the CFO.

However, hackers gained access to the generic admin mailbox and sent an email to the finance department regarding a change of bank account. The General Manager was having an email conversation with a sub-contractor and received an email from them with an invoice and note about new bank account details, although all other details of the email were the same. The invoice amount was correct and was not flagged as suspicious. The bookkeeper changed the bank details and did not follow the company policy of verifying this change. This resulted in $82,000 being paid to a person in Perth, who was the victim of a ‘love scam’ and was acting for ‘the loved one’ in withdrawing the funds from this false account and sending it overseas to the hackers.

The Cyber Policy replaced the funds lost to the contractor of the Insured in full, thus maintaining that business relationship, as the Insured still owed the money to the contractor, although it was paid in good faith. The Cyber Policy forensic investigation of the event provided the Insured with detailed reporting and instructions on how to avoid such a loss in future. The costs to clean-up their systems were covered under the claim also.

What are some of the most common mistakes people make when it comes to property insurance?

The single biggest mistake is to underinsure your ‘Sum Insured’ assets. Most insurance policies are ‘New for Old Replacement’ so you need to make sure the sum insured selected will replace everything. Whilst most policies allow for a margin of error, if you are more than 15% undervalued the insurer can seriously reduce your claims payout, which of course is the last thing you need following a substantial loss from a fire or storm. An increase in the Sum Insured means the premium will, of course, increase too. To offset this, you could increase the Excess payable on a claim.

What are the key things landlords should know about property insurance?

The main difference for Landlords Insurance versus the policies for home-owner/occupiers is the need to have cover for losses directly associated with tenant behaviour. These include accidental damage by the tenants, theft by tenants and loss of rent.

Geoff, thanks for your time and insights, insurance is such an important issue!

Contact the experts today to find out how we can help you buy, sell or manage your investment property in Toowoomba.

Article by James O'Donohue

Delivering a premium service experience has been Team Elevate’s primary focus since commencing their real estate journey. James and Shaun create… View profile

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