Cyber insurance for businesses provides coverage against data breaches, enabling you to recoup business disruption costs, revenue loss, and other losses. It’s important to invest in this insurance policy as cyberattacks have risen sharply. From 2020 to 2021, cyber-attacks on small business networks soared by 26.8%, and the trend shows no signs of decline. Here’s why every business, large or small, should have proper cyber insurance coverage.
Holding and processing customer data or personally identifiable information (PPI) or protected health information (PHI) comes with heavy legal responsibility. Whether you keep the data on-premises or in the cloud, you’re responsible for securing it. To minimize your cyber liability risk, you should implement adequate cybersecurity measures and test everything to ensure your data is safe in storage and transit.
Cyber insurance can also add a key layer of protection against financial loss if someone successfully breaches your system. This policy will cover your litigation costs in the event of data loss due to a cyberattack and other various expenses, including breach notifications to affected customers and remediation efforts.
Modern workforces are highly flexible and mobile, which means the movement of digital devices like laptops to and from the workplace is the norm today. This mobility places key gadgets and data at a greater risk of loss or theft. There are measures you can take to minimize your organization’s data loss or theft exposure. For instance, you can implement strong password security policies, including regular changes.
Ensure you encrypt any data at rest and don’t store any sensitive files on laptops or other mobile devices.
Despite your best effort to safeguard your office devices, private customer or employee data can still be stolen or lost. This is another area that can benefit from cyber insurance for businesses. In the event of accidental or deliberate disclosure of private/confidential information, you could be held liable. In such instances, cyber insurance could pay to recover your lost devices and the cost of defending your business in court if sued by impacted parties. Most policies also cover investigations expenses.
Once attackers have breached your corporate network, you should notify any impacted customers and other parties right away. This is required by law and can increase data breach costs by about $1.72 million on average. Cyber insurance for your small business can pay for legal counsel to help you properly manage the crisis. If personal data has been exposed or stolen, you may also enlist an incident breach response vendor for help with customer notifications, another legal requirement in most states. Your cyber insurance policy would pay for this too.
Computer forensics is an important part of network breach management. After a cyberattack, you’ll need to enlist analysts to probe how much damage has occurred and determine whether customer data may have been affected. Cyber insurance can cover these expenses to protect your company’s finances.
Various types of network breaches, such as ransomware or distributed denial of service attacks (DDoS), can interrupt your business operations, causing loss of revenue. A cyber policy can reimburse your losses during the covered shutdown period. It can cover utility bills and payroll obligations that remain despite the temporary closure of operations.
Cyber insurance is no longer a luxury you can disregard. To help assess your small business cybersecurity coverage needs and get a quote, contact our experts at CF&P Insurance Brokers today. We would be happy to help create a customized insurance policy for the optimal data security of your business.