Being at risk for cyber-attacks is a growing concern among small-business owners. Cybercriminals often target small businesses because they hold sensitive information and have weaker security infrastructures than larger businesses. For this reason and more, it should be no surprise that 88% of small-business owners feel vulnerable to a cyber-attack, according to a recent survey conducted by the U.S. Small Business Administration.
To protect your business and your customers, you must implement strong cyber security practices in your business. You need to run your employees through annual cyber security training so they know the newest cyberthreats and how to avoid putting the company at risk. You should also utilize a firewall, back up your data on all computers, secure your WiFi networks and ensure your entire team understands the importance of strong passwords. To give your business an extra layer of protection, though, you can get cyber insurance coverage.
Cyber insurance, often called cyber liability insurance, covers the damage your business suffers if you’re the victim of a cyber-attack or data breach. Here are a few areas where having cyber insurance can help.
Imagine that a cybercriminal gains access to sensitive information, such as your employees’ Social Security numbers or your customers’ credit card numbers. You know the release of this information could cause irreparable harm to your business, and you’re willing to pay whatever it costs to prevent this from happening. This is the goal of ransomware attacks. Hackers threaten to publish sensitive information or lock you out of vital programs if you don’t pay them. Cyber insurance will help you pay the ransom.
If sensitive customer information gets stolen from your business, you have a legal obligation to inform your customers. The average cost of notifying customers of a breach and other post-breach responses is $1.72 million, according to the Ponemon Institute Cost of Data Breach Study. That’s a cost most small businesses cannot afford, but cyber insurance will help cover it.
If your business becomes the victim of a data breach, you’re going to want to get that information back. Your policy can protect you and your employees from identity theft, as your insurance provider may pay for identity recovery services. These are invaluable services, since data and identity recovery can take years to handle on your own.
Cyber insurance can also help cover the costs of customer and employee lawsuits after a data breach, lost income due to network outages and even regulatory fines. Most cyber insurance policies come with exclusions to which you need to pay attention. Your policy will probably not cover attacks that happened before your coverage started, future profits affected by a data breach or the loss of valuation after a cyber-attack.
But how do you get cyber insurance for your company? You have to meet certain qualifications to get a policy, due to the rise in cyber-attacks and cyber security awareness. Every cyber insurance provider will look at the strength of your network security before considering your business for coverage. If your network is weak and at a high risk of being targeted, they are not going to take a chance on you.
If your business is within an industry that requires cyber security compliance, make sure you’re compliant. If you’re not, cyber insurance providers won’t even give your business a second thought before rejecting your application for coverage. This shouldn’t be an issue, as most businesses stay compliant, but double-check your requirements to ensure all your bases are covered.
If you’re considering cyber insurance but are worried about the cost, you can do a few things to make it more affordable. Cyber insurance providers like to provide coverage to businesses that are proactive with cyber security practices. Implementing an incident response plan will show providers your business has procedures in place to handle emergencies if they arise. Researching all third parties you work with and showing they have strong cyber security practices will also benefit you.
Cyber insurance can be an incredibly beneficial cyber security element to add to your business. As new cyber-attacks and threats continue to develop, it’s essential to get all of the protection you possibly can.