Small Businesses Should Consider Cyber Insurance

In the Internet-dominated business arena, companies store more sensitive information than ever on their computers. But a shockingly low number of small businesses have invested in cyber liability insurance to combat the potentially devastating effects of a cyber attack.

In fact, many small business owners are unaware of the high risk data breaches at their establishment, in the belief that hackers are likely to attack only high-profile, high-revenue firms. Although such breaches obviously occur, they do so significantly less frequently than among small businesses.

The “newsworthiness” of data breaches at larger corporations often overshadows the more frequent security violations that target small businesses.

Regardless of a company’s size or industry, business owners must take action to secure their customers’ valuable data against the possibility of a cyber-attack. In addition, investing in cyber liability insurance protects your assets should such an event occur.

The High Costs of Data Breach Recovery

When criminals get access to company databases, they become privy to a vast array of information, including customers’ Social Security numbers, credit card numbers, addresses and other identifying data.

They also gain access to sensitive business data, which they can use to open and access accounts, drain money and destroy the affected individuals’ credit. Recovering from a business data breach can cost companies thousands of dollars in fines and lost reputation.

Such expenses often include:

•    Business interruptions. Not only must hacked businesses often close their doors while they investigate the source and impact of data breaches, they also suffer from decreased sales due to negative publicity and diminished customer confidence. The days or weeks a firm spends out of commission represent lost profits and opportunities.

•    Security overhauls. Updating or implementing a new security system costs a great deal in software, infrastructure and personnel. It also requires training staff in new policies and procedures.

•    Concessions to customers. As a sign of goodwill, many businesses affected by data breaches offer free credit monitoring services to customers for a specified period of time after they occur. These and other perks, such as discounts or service promotions, help regain customer trust and loyalty. However, they do so at a cost.

•    Bankruptcies and business closures. It’s also the case that a number of small businesses have to shut down within a few months of a data breach. From stolen resources to the expense of responding to a cyber-attack, these incidents have the potential to deplete the savings of the most promising small business.

Though cyber-attacks can have these and other grim consequences for your company, cyber liability insurance provides valuable resources to help regain what your business may have lost.

Cyber Insurance can effectively support your Business

“For small businesses, nothing is more important than protecting their livelihood,” says BankingSense.com editor Natalie Cooper. “Cyber liability insurance is another tool they can use to prevent financial disaster in the event of a malicious attack.”

Like other types of coverage, cyber liability insurance covers policyholders in the event of a specified loss – in this case, a cyber-attack. As business owners work to recover information and resources from a data breach, the insurance covers expenses such as credit monitoring for affected customers, lost revenue, crisis and reputation management, customer notification and investigation of the attack.

As the popularity of cyber liability insurance increases, policies are available at prices any size of business can afford, from small startups to multinational corporations. Representing a small percentage of a company’s annual insurance costs, this product comes at a low premium in comparison to the potential repercussions of a data breach.

Cyber insurance as part of an overall Security Strategy

Regardless of the size, age, industry or number of customers your company possesses, investing in cyber liability insurance may be crucial if you store sensitive data online. However, you should also recognise that insurance will not prevent a data breach from occurring.

To protect themselves most effectively from cyber-attacks and their devastating consequences, companies must incorporate cyber insurance into an overall security strategy that includes substantial security safeguards and a decisive incident response plan.

Although the rise of e-commerce and virtual data storage means limitless opportunities and convenience for businesses of all sizes, the threat of data breaches requires companies to use every tool at their disposal to protect their data and livelihood.

Because it covers expenses should the worst occur, cyber liability insurance is a necessity in any business security plan.

Does your company’s data breach response plan include cyber liability insurance? Leave a comment and share what steps you’re doing to protect your business?

Hiscox

Please Contact: Cyber Security Intelligence for free Cyber Insurance Information.

You Might Also Read:

Five Pitfalls of Cybersecurity Insurance:

Cyber Crime Drives Up The Cost Of Insurance:

Time To Speak The Language Of Risk:

 

 

 

« How Cybersecurity Benefits from Hackers
Employees That Cause Data Breaches »

CyberSecurity Jobsite
Perimeter 81

Directory of Suppliers

ManageEngine

ManageEngine

As the IT management division of Zoho Corporation, ManageEngine prioritizes flexible solutions that work for all businesses, regardless of size or budget.

LockLizard

LockLizard

Locklizard provides PDF DRM software that protects PDF documents from unauthorized access and misuse. Share and sell documents securely - prevent document leakage, sharing and piracy.

Clayden Law

Clayden Law

Clayden Law advise global businesses that buy and sell technology products and services. We are experts in information technology, data privacy and cybersecurity law.

Syxsense

Syxsense

Syxsense brings together endpoint management and security for greater efficiency and collaboration between IT management and security teams.

DigitalStakeout

DigitalStakeout

DigitalStakeout enables cyber security professionals to reduce cyber risk to their organization with proactive security solutions, providing immediate improvement in security posture and ROI.

Energy Sec

Energy Sec

EnergySec is a United States 501(c)(3) non-profit corporation formed to support energy sector organizations with the security of their critical technology infrastructures.

VTT Technical Research Centre of Finland

VTT Technical Research Centre of Finland

VTT is the leading research and technology company in the Nordic countries. Areas of activity include cyber security.

Cisco Talos

Cisco Talos

Talos is an industry-leading threat intelligence solution that protects your organization’s people, data and infrastructure from active adversaries.

Advanced Software Products Group (ASPG)

Advanced Software Products Group (ASPG)

ASPG offers a wide range of innovative mainframe software solutions for Data Security, Access Management, System Management and CICS productivity.

Ubiq Security

Ubiq Security

Ubiq has developed a software solution that secures any type of data, on any device, anywhere, with nearly no impact to system performance or user experience.

Cryptosense

Cryptosense

Cryptosense provides the first application security software dedicated to the detection and remediation of crypto vulnerabilities.

Ensign InfoSecurity

Ensign InfoSecurity

Ensign InfoSecurity is Southeast Asia’s largest pure-play cybersecurity firm.

Elliptic

Elliptic

Elliptic solve the crucial problem of identity in cryptocurrencies, with the sole purpose of combating suspicious and criminal activity.

ClearBlade

ClearBlade

ClearBlade is the Edge Computing software company enabling enterprises to rapidly engineer and run secure, real-time, scalable IoT applications.

CTM360

CTM360

CTM360® is a Cyber Security subscription service offering 24 x 7 x 365 Cyber Threat Management for detecting and responding to cyber threats.

Innovasec

Innovasec

Innovasec provide information security consulting and training services.

Curricula

Curricula

Curricula's cyber security awareness training delivers short relatable security stories to your employees. We make learning cyber security simple and fun.

Fluid Attacks

Fluid Attacks

Fluid Attacks specialize in red team operations as well as technology development that continuously enhance our security testing services.

Alea Consulting

Alea Consulting

Alea Consulting is a global risk mitigation and investigative consulting firm, which helps organizations reduce reputation and operational concerns.

MicroAge

MicroAge

Powered by five decades of experience, lasting partnerships, client relationships, and the values that guide us daily, MicroAge is here to help you secure, accelerate, and transform your business.

NeuroID

NeuroID

NeuroID combines the power of industry-leading behavioral analytics with advanced device and network intelligence to create your first line of defense against malicious bots, bad actors, and fraud.