As agencies grow increasingly reliant on digital platforms to manage sensitive candidate and client information, the threat of data breaches, ransomware, and other cybercrimes is ever-present.

Cyber insurance serves as a safety net when other processes or safeguards fall short, but it shouldn’t replace proactive data security measures and robust IT system defences.

Why are recruitment firms particularly risky?

Agencies collect, hold and share a significant amount of personal, and often sensitive, information, making them attractive targets for cybercriminals.

It would be common practice for agencies to handle large amounts of personally identifiable information, including:

• Tax File Numbers
• Resumes
• Identification documents such as passport and driver’s license
• Financial/banking information
• Home addresses
• Health records (in some cases)

For on hire firms that are handling large amounts of money, with client payments coming in and employee payments going out, this frequency and volume of transactions can be a target for criminals.

They are also having to manage a large volume of new employees and/or contractors, as well as off boarding some too, which heightens the need for personal information and data security and accuracy.

This creates a heavy burden on record keeping but more importantly a reliance on systems and data to be up to date and secure. Destruction policies and procedures for outdated information such as historic resumes, past employee tax file numbers and bank accounts, should be in place to reduce the number of personal records being held.

The optimal solution goes beyond just having insurance

While cyber insurance is important, it’s not the first line of defence against cyber-attacks. To effectively mitigate these risks, consider implementing the following security measures:

• Keep your software and systems up to date
• Use Multi-Factor Authentication
• Install Firewalls
• Regularly back up your data
• Conduct ongoing employee training
• Finally, secure a cyber insurance policy

What to consider when you get hit by a cyber attack

As cyber threats become more sophisticated and frequent, clients are more aware of the risks posed by third-party relationships. Ensuring that recruitment firms have a cyber policy in place on top of security measures is a way to both mitigate and manage these ever-evolving risks.

Here are some other considerations if things go wrong:

• Quick recovery – Cyber insurance often provides resources for incident response and recovery, ensuring that the firm can resume operations quickly after an incident. This is crucial for clients who rely on timely recruitment services to maintain their own business operations.
• Protecting a client’s brand image – A data breach can harm the reputation of both the recruitment firm and its clients. Cyber insurance can cover the costs of public relations efforts to manage the fallout and restore their confidence amongst stakeholders and the public.
• Contractual obligations – Larger organisations often require their providers to have cyber insurance. If you have an incident but don’t have cover, this can affect your contractual obligations as well as your relationship.
• Data handling – Recruitment firms handle sensitive information of their clients and employees, and a data breach not only exposes this information but can lead to identify theft or financial fraud.

What does cyber insurance cover?

Cyber policies vary in the benefits provided. Here are some types of cover that a policy may include:

Having cyber security measures in place including insurance is essential for recruitment agencies to protect against the financial, legal and reputational risks associated with cyber incidents. It provides a safety net that can help agencies recover quickly and minimise the impact of cyberattacks on their operations.

To learn more, contact our specialist Mark Laudrum at mlaudrum@pno.com.au