Understanding Your Business’s Options for Cyber Insurance

Small business owners often underestimate the threat cyberattacks can pose to their business. However, many cyber attackers view small businesses as easy targets. Attackers know that small businesses are less likely to have the network securities of a larger company. A recent study found that 67 percent of companies with fewer than 1,000 employees have experienced cyberattacks.

These attacks can be costly and hard to recover from. However, there are many steps you can take to defend your business against cyberattacks. Understanding your company’s cyber risks and how to protect yourself in case of an attack is the best way to get started.

The Cost of Cyberattacks

Cyberattacks can cost your company money, resources, and the trust of your clients. Hackers are finding new ways to get your data, shut down your networks, and extort your business for profit. As more companies rely on technology for their day to day operations, hackers continuously develop new and innovative ways to attack your networks.

Many of these attacks can cost small businesses in the form of lost revenue and damaged client networks, forcing them to close down. Others find that they can’t pay the high ransoms asked of hackers. No matter what a hacker intends to accomplish from the attack, your business can still take a hit if customers or would-be customers catch wind of the attack.

The First Line of Defense

The best way to protect your network is through preventative action. You can accomplish that by investing in cybersecurity software like next-generation antivirus or endpoint detection. Up-to-date software can help prevent attacks from succeeding in taking down your entire network.

Equally important is training your staff on how to identify threats and keep their virtual workspaces safe. One of the most common cyberattack forms is phishing, which uses malware disguised as an email or other clickable link. Go over link safety with your staff, and make sure they know how to recognize malicious emails.

Insurance Coverage Options

As cyberattacks become more prevalent, it may also be worth investing in cyberattack insurance. However, there isn’t a single standard for cybersecurity insurance at the moment. Different insurance providers will call their policies by other names, and each policy will cover slightly different circumstances.

In general, most cybersecurity coverage will protect your company from financial losses if it experiences a cyberattack. Some companies may have a single cybersecurity plan, while others may have data breach insurance and cyber liability insurance as distinct policies.

Cyber liability insurance often covers two different categories of liability: first-party and third-party. First-party coverage deals with financial losses directly incurred by your business, such as:

  • Notifying customers of the attack
  • Purchasing credit monitoring for affected customers
  • Funding a public relations campaign to protect your reputation
  • Investigating the cause of the breach
  • Paying ransom to attackers who hold your data hostage
  • Reimbursing for business interruptions and revenue losses

Third-party cyber liability, on the other hand, deals with legal expenses that result from a security breach. If a hacker successfully accesses your network and causes damage or releases sensitive customer data, you may face fines from regulatory organizations, negligence lawsuits, or breach of contract claims.

Insurance Fit for Your Business

When choosing cybersecurity coverage for your business, start by determining if you need to purchase a new policy or if you can add it to an existing plan. Decide if you need first-party, third-party insurance, or both, and how much coverage makes sense for your business.

One of the best ways to ensure you’re getting the best policy is by requesting a small business insurance quote for each policy you’re considering. Request quotes from multiple insurance providers and for various forms of small business insurance, including each type of cybersecurity insurance the agencies offer.

Cybersecurity and Your Business

No matter the size of your business, you’re vulnerable to cyberattacks. These attacks can be costly and hard to recover from, especially if you’re a small business with limited resources. Be sure to protect yourself from the worst-case scenario and determine which type of cybersecurity insurance makes sense for you.

Unnati Vaidya is a freelancer Content Writer and SEO generalist. She is an enthusiastic reader of Novels and a big fan of watching Sci-fi movies and seasons!

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