Are You Prepared for the New Era of Cybercrime? What Strata Managers Need to Know

Many people are desensitised to the continued warnings about cyber threats.

But cybercrime isn’t something that happens to someone else. It could happen to you, whether you’re an individual, a small business, a large corporation or a strata scheme.

The risks keep changing as cybercriminals evolve their tactics and develop new forms of attack.

Strata managers need protection

Strata managers are responsible for the financial affairs of a strata scheme and bear a significant amount of duty to protect the scheme’s interests.

Cyber insurance can ensure the strata scheme’s funds are protected as well as safeguard the strata manager’s own funds and reputation. Without this, the strata manager will be liable to cover any financial loss.

Providing strata schemes with evidence of a strong policy can also build owners’ trust and offer confidence that the manager is protecting them and acting in their best interest.

Cybercrime is a big business

A cyberattack is an attempt to access a computer network or system with the intent of altering, stealing, destroying, or exposing information.

Cyberattacks don’t just happen to large corporations – these are just the ones that make the news headlines. SMEs are arguably more exposed because their systems are often manual and prone to human error, which accounts for a significant percentage of cyber losses.

According to cyber insurance underwriters, Emergence Insurance, “SMEs are particularly vulnerable. Cyber insurance can be the difference between surviving an attack or going bust. Immediate and effective incident response is crucial to mitigating the impact”.

Staggering statistics

Well-resourced teams of cybercriminals are earning themselves billions in ransoms and causing trillions of dollars in damage every year. It’s one of the most significant and costly threats to businesses.

• Worldwide, cybercrime costs companies an estimated $8 trillion in 2023…and is expected to be nearly $24 trillion by 2027.

Small and medium businesses (SMEs) face the most significant risk from cyberattacks.

• 43% of cyberattacks target small businesses*.
• SMEs are less prepared to defend against cyberattacks – 48% of Australian SMEs spend under $500 a year on cybersecurity.
• Business interruption is currently the primary driver of cyber claim costs in Australia due to a business’ inability to generate revenue during and after an attack**.

Common types of cyberattacks in strata

The strata industry is relatively silent about cyber events. However, they have occurred, sometimes resulting in significant losses. Strata managers fear reputational damage, so they quietly repay the stolen funds into the strata scheme’s account, for example.

• Email interception. This is the most common type of attack in strata. Cybercriminals intercept emails from a strata manager, its clients or suppliers to alter invoices and other payment information. The cybercriminal may advise of a change to bank account information and claim that failing to verify account details verbally with the supplier may result in payment to a cybercriminal.
• Social engineering. Uses psychological manipulation to trick users into making security mistakes or giving away sensitive information. A simple phone call may be all that stands between your strata scheme and the cybercriminal.
• Phishing. Entices users to click on malicious links that may download infected files or reveal personal information, such as passwords or account numbers. Cybercriminals may pose as retailers, banks or financial institutions.
• Ransomware attacks. Uses malicious software (malware) to encrypt files or block access to a user’s computer systems. This could damage a strata manager’s accounting system and make funds inaccessible, for example.
• Identity theft. The theft of private and confidential information about scheme members can lead to identity theft, where personal information is sold on the dark web.

Plug into a network of support

The broader cyber landscape is undergoing significant shifts. Cyber insurance provides cover for first-party expenses and third-party liability resulting from unauthorised access and use of data or software within IT infrastructure.

It helps manage more than just the initial financial loss.

• Business interruption
• Hiring negotiators and paying ransoms
• Recovering/replacing records or data
• Liability and loss of third-party data
• Legal defence
• Copyright infringement
• Misuse of intellectual property online
• Crisis management and monitoring
• Preventing further attacks

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The more strata managers and schemes that take up cyber insurance, the stronger the fight becomes. Together, we can make the strata sector more secure and resilient, while enhancing its professional reputation and managing evolving risks.

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Good cyber insurance is no longer a luxury. Cyberattacks can come in many forms, but knowledge, sound monetary policies, and vigilance are essential.

The future will bring increased regulatory oversight as governments and agencies respond to the growing frequency and severity of cyber incidents. Businesses will need to demonstrate both strong prevention protocols and the ability to recover from and respond effectively to cyberattacks.

Don’t leave a significant exposure underinsured or risk being inadequately covered. Talk to us about cyber insurance.

*Accenture’s Cost of Cybercrime Study 2023 **Emergence Insurance cyber claims data report 2025