Risk & Business Magazine Spectrum Insurance Magazine - Spring 2019 | Page 5
CYBER LIABILITY
Why Even Small Businesses Need
Cyber Liability Protection
D
o you think your business is
so small that it is safe from
cyber-attacks? No matter how
small your business, if you have
a computer and a customer list,
you are vulnerable to being hacked. Most
hackers in this day and age realize that
larger organizations are taking every means
possible to protect themselves and their
customer data with sophisticated software
tools and resident IT experts. So hackers
have set their sights on smaller, more
vulnerable organizations.
A 2017 survey by Manta revealed that
87 percent of small-business owners do
not believe they are at risk for a cyber-
attack. Most of these businesses don’t have
any dedicated information technology
personnel, and many don’t have even simple
means of protection in place, such as anti-
virus software, firewalls, spam filters, or
data-encryption technology.
Yet the problem is far from hypothetical.
Research by the National CyberSecurity
Alliance shows that at least half of all cyber-
attacks now target small businesses, defined
as those with fewer than 250 employees.
Even more alarming, multiple reports
show that half of all small businesses have
already been breached—often without
even the knowledge of company leadership.
Sadly, about 60 percent of small businesses
affected by these attacks are so damaged
that they end up going out of business
within six months. •
Personally Identifiable Information (PII),
including names, addresses, driver’s
license numbers, and credit card numbers
are all at risk as well as Protected Health
Information (PHI), such as medical
records. Once an individual’s PII is stolen,
it can take years and countless hours of
frustration to restore the individual’s good
name. A good information technology
consultant can help you take simple steps to
protect your data from these crimes. •
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:
• 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
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
Since cyber liability is a fairly new area
of insurance and is changing every year,
be sure you work with an agent that is
sufficiently knowledgeable about this
complex field. For more information or to
discuss your specific needs, please
contact us at 715-858-9865 or
spectruminsgroup.com.
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