CYBER INSURANCE
Why Small Businesses Need Cyber Insurance
Just because your company is small does not mean you are immune to cyberattacks . While small business owners focus on growing their companies and generating revenue , they can overlook a critical component to long-term success — cybersecurity . They believe that since they use third-party systems to process transactions , they are safe from hacking and malware . That kind of thinking can be dangerous . In fact , cybercriminals are aware that small businesses are easy targets because they typically have less security in place than larger companies .
When COVID hit , many businesses moved from in-person operations to virtual platforms , making cyber threats more common and cyber insurance more important . Any business using computers to complete day-to-day tasks — especially businesses that store their customers ’ personal data and / or credit card information — should consider cyber insurance a necessary coverage . Businesses are increasingly facing cyber risks that can threaten their operations and even their very existence . Adding cyber insurance is a small cost , but the risk of not doing so can be devastating .
WHAT IS CYBER INSURANCE AND WHY DO YOU NEED IT ?
According to a recent report in Forbes magazine , 43 % of cyberattacks are aimed at small businesses while only 14 % of them are prepared to protect themselves from such an attack . What ’ s more , many of these businesses never recovered after they were attacked .
Cyberattacks can cost a company up to a million dollars in damages . Personally identifiable information — data such as an ID number , location data , or online identifiers — are the most reported data breaches , with credit and payment card information being one of the most frequently stolen pieces of data . In the medical industry , Protected Health Information ( PHI )— such as medical records — is also at risk . Maintaining cyber liability insurance will help keep companies operational after an attack .
A cyber liability insurance policy can help protect your business financially in the event of an attack . Policies can differ widely , and there are no set minimum criteria , so you ’ ll have to work closely with your agent to find the policy that ’ s best for your organization . Here are some basic coverage areas to consider :
• Disaster recovery costs , which may include expenses for forensic accountants , attorneys , and advisors
• Crisis management , to help contain any bad publicity stemming from the breach
• Social engineering fraud , which can result when hackers trick trusted employees or vendors into disclosing sensitive information
• Extortion , which includes threats by foreign entities that can only be satisfied through large cash payments
• Third-party damage covering violations committed by a subcontractor you hire , such as a mail house or fulfillment center
• Business interruption , in the event that damage to your computer systems leaves your company unable to function for some period of time
• Credit monitoring services , allowing customers suffering data exposure to periodically check their credit status
If you are hit by a cyberattack — by ransomware , for example — your policy will not only reimburse you for the ransom payment , but it will also cover all of your lost expenses as a result of the attack .
We are here to answer all of your questions and to assess all of your cyber insurance needs . +
BY : NICK D ' ONOFRIO , ASSOCIATE ADVISOR , JGS INSURANCE , A BALDWIN RISK PARTNER
Nick D ’ Onofrio entered the insurance industry with the intention to provide peace of mind for businessowners . By working closely with owners , he is able to help small businesses navigate through the complexities of the industry and provide the coverage that fits their unique needs . In providing extensive customer service and analysis , Nick is able to move insurance away from being transactional based business to a service-oriented business .
15