The simple answer is yes. If you have a computer—or even just do business with someone who has a computer—you, your business and your information are at risk.
And the consequences can be severe. Sixty percent of small businesses close within six months of a data breach.
For small and medium-sized businesses, cyber coverage might seem unnecessary. But data breaches aren’t just for big retailers. While those large-scale attacks generate headlines, most cyberattacks target businesses with less than 250 employees.
And if you think your business liability insurance has got you covered, think again. Standard business liability insurance typically doesn’t cover cyber liability, and with new threats emerging rapidly in the digital world, cyber liability will likely remain separate from business liability.
Now that you know the facts, here’s how cyber coverage can help your business:
A data breach is a security failure where sensitive, protected or confidential data is copied, transmitted, viewed, stolen or used by someone who is not authorized to do so.
It can be as high-tech as a hacker cracking a complex encrypted system or as simple as an employee losing a smartphone. And it happens more often than you can imagine. More than 1 billion personal information records were stolen in 2014 alone.
Losing your customers’ data can quickly become expensive. In 2015, the average cost paid for each lost or stolen record containing confidential information was $154.4 And there can be severe penalties for losing credit card data, along with the costs of forensic investigations, credit card reissuance and fraud. But maybe the biggest cost is the loss of your customers’ trust if you aren’t covered by insurance or prepared to remedy the situation.
Whether it’s your company handling someone else’s data or a vendor that handles your sensitive information, you must make sure you’re protected.
Even if you’ve entrusted someone else or another company to keep your data safe, cyber coverage can cover you if that information is ever lost or stolen.
Ransomware and extortion
Hackers who target small businesses will sometimes install malware on your system or devices, then demand payment to remove it. With cyber coverage, your business can be protected against this kind of threat.
Cyber coverage is rapidly evolving and determining your risk and needs is essential. The best way to find what fits your business is to speak with an independent agent. Your agent will review your business exposure, different coverage options and make the best policy recommendation for you.
1 - U.S. House Small Business Subcommittee on Health and Technology
2 - Aabacosmallbusiness.com
3 - Quickbooks.intuit.com
4 - Securityintelligence.com