What is Precautionary Shutdown Cover?

Precautionary Shutdown Cover offers a safety net for businesses that choose to shut down systems before a cyber incident causes damage. It’s like pulling the fire alarm before the flames spread—and still being covered.

Key Benefits

• Business interruption protection: Covers lost profit when systems are shut down to prevent a cyber-attack.

• Reputation management: Helps mitigate reputational damage by supporting early action and transparency.

• Encourages proactive risk management: Empowers businesses to act swiftly without fearing insurance won't respond.

Examples of when it applies

• Ransomware threat detected before encryption begins: A company’s IT team spots suspicious activity linked to a known Ransomware strain. They shut down servers pre-emptively to isolate the threat. Even though no files were encrypted, the business interruption costs are covered.

• Third-party IT supplier breach: A retailer learns that its cloud provider has suffered a cyber event. To prevent exposure, they shut down their own systems temporarily. Precautionary Shutdown cover helps with lost revenue during the downtime.

• CERT Australia recommends shutdown: A business is advised by the Computer Emergency Response Team to halt operations due to a credible threat. They comply and the cyber insurance policy covers the financial impact.

Why It’s a Game-Changer

Traditional cyber insurance often requires proof of damage or breach. This coverage flips the script—rewarding smart, preventative action rather than punishing caution.

Sync Underwriting & Precautionary Shutdown Cover

Sync Underwriting provides Precautionary Shutdown Cover in every policy by default, to the full Limit of Liability.

For further information, please contact:

Richard Smith

Richard.Smith@syncuw.com.au

Mobile – 0477 377797

Sync Underwriting Pty Ltd (“Sync Underwriting”) (ABN 17 678 294 712) is an insurance underwriting agency and distributes and administers insurance policies on behalf of Insurers. Sync Underwriting is a Corporate Authorised Representative, CAR No. 1312389, of Halo Underwriting Pty Ltd (ABN 48 008 497 318). The article contains commentary of Sync Underwriting’s cyber insurance policy, Policy Wording v 1.0, and coverage contained within. This article does not form part of the policy terms and conditions. You must read the full policy wording for a full description of the terms and conditions. Please note that any individual claims will be determined on the facts of the incident and any claims examples contained within this article do not relate to individual circumstances.