December 2, 2020
Cyber Liability Insurance: What It Is and Why You Need It
In this day in age, virtually every business utilizes technology in some way or another. As your business moves forward with the latest and greatest in technological advances, you should be aware of the potential for data breaches, or cyberattacks, that can cost your business thousands of dollars to handle on its own. If you are handling personal data of any kind, cybersecurity and cyber liability coverage are of the utmost importance when it comes to operating your business.
Why is Cybersecurity So Important?
Cyber liability insurance protects your small business in the event of a cyber attack or a breach in your cybersecurity. This type of insurance can ensure your company responds quickly, affordably, and effectively to cybersecurity threats or attacks. Cybersecurity is one aspect of business that can be overlooked by small business owners, but storing and transferring personal data of some kind, be it a customer or employee’s data, means the threat is real and dangerous. A 2018 poll reported that only 16% of all small business owners believed they were at risk for a cyberattack, though the actual risk is far higher.
We often hear of massive corporate data breaches because they impact thousands, sometimes millions, of individuals, and it always makes the news. But the truth is, data breaches and cyberattacks are not only happening to large corporations. Small businesses are the most vulnerable to cyber attacks, and they can stop you dead in your tracks. In fact, a 2017 study showed that over 60% of all cyber attacks were on small businesses. Data breaches compromise the PII or personally identifiable information of your customers or employees. They can include sensitive information like social security numbers, credit card information, health records, and drivers license numbers, making your company liable.
How Do Cyberattacks Occur?
Cyberattacks can occur through a variety of methods, and these attacks are getting more creative every day. Hackers look for opportunities and vulnerabilities within your system, like weak or default passwords. Phishing is another common way hackers access your information through an email sent to your customer or employee requesting they log in with their password. This allows access to the data within their account and possibly others, depending on the individual and their credentials. Viruses can damage your system, causing a data breach, and ransomware can impact businesses and individuals, holding data until a sum of money is released. Personal data is valuable, which is why it should be highly protected and why your business should be covered in the event of a breach.
What Does Cyber Liability Insurance Cover?
Cyber risks covered by cyber liability insurance include security, operations, and privacy risks. These policies protect your company through agreements including errors and omissions, media liability, business interruption, and network security and privacy. Cyber liability insurance is not typically a one-size-fits-all and can be customized based on your individual business needs.
Cyber liability insurance can assist with legal fees and expenses of resolving a data breach or cyberattack, as well as cyber extortion reimbursement. Cyber insurance can typically offer assistance with contacting customers about the breach and helping to restore data. In many states, it is required that businesses contact their customers when there is a data breach, which can be a costly task without coverage. Certain cyber liability insurance also aids in repairing the computer systems that were damaged in the attack and offers credit monitoring services to those affected.
Cyber Liability Insurance Costs
Certain aspects of cyber insurance are included under your regular liability insurance. However, if your business is storing or accepting any type of PII, it is imperative that you utilize cyber liability insurance. Cyber liability insurance cost varies depending on a few factors, including your business size, your industry, and the amount of data you handle.
To learn more about cyber liability insurance and how it can work best for your business, contact us today. Interested in personal identity theft coverage, we can help with that also!
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