XL Catlin has introduced a cyber and data protection policy in the Asia-Pacific region as governments impose more stringent regulations that raise the stakes for companies.

The policy covers business interruption, extortion demands, response costs and third-party liabilities that organisations face following a data breach. It also covers liability associated with media exposures, invasion of privacy and false advertising in offline and online content and social media.

Country Manager for Australia Insurance Robin Johnson says Canberra passed a law in February requiring mandatory notification of data breaches, and companies need to comply within a year.

Singapore and Hong Kong are considering similar provisions, while countries including China, Japan, Malaysia, South Korea and Taiwan have introduced laws or more exacting standards for data and network protection, XL Catlin says.

“With increasingly stringent regulations, as well as the financial and reputational fallout of a cyber incident, companies need to have a robust risk management strategy and the right insurance solution to protect themselves against cyber risks,” Mr Johnson said.

A report by Juniper Research estimates the cost of data breaches will reach $US2.1 trillion ($2.7 trillion) worldwide by 2019, almost four times the estimated cost in 2015.

“No company is fully secure, no matter how superior its cyber-defence mechanisms are,” International Financial Lines Regional Manager Timothy Powell said. “They must proactively embed cyber risk management in their strategies and operations to combat the unrelenting threat.”