What is Cyber Liability Insurance?

16
April 2018
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True or false?

Big businesses – such as Home Depot, Target, and Yahoo – are the main target for cyber attacks.

Surprisingly, the answer is “false.”

These hacks and attacks typically make headlines because of the name recognition factor of the business or for the sheer number of third-party individuals that become victims as a result of the data breach.

However, bigger businesses only account for a very small percentage of all cyber attacks.

Small businesses owners tend to feel exempt from such attacks. After all, why would hackers waste their time on smaller businesses when they could go after the big guys?

The truth is, small businesses are the main target for cyber criminals.

Of all cyber breaches in 2016, 61% were directed at small businesses. Sadly, a lot of these businesses are unable to recover.

The average cost of a data breach for a small business is approximately $84,000 - $148,000. Could your business afford the loss should you be the target of cyber criminals?

Most can’t.

As many as 60% of small businesses that suffer a cyber attack do not recover, closing up shop within 6 months.

Cyber liability insurance is a must-have policy to protect businesses across every industry from cyber risks.

What Kind of Cyber Risks Does Your Business Face?

There are two types of cyber attacks that you need to protect your business against:

  1. Unauthorized access to sensitive and confidential information.
  2. A malicious and intentional attack on a network or computer.

When you think of a hack, you’re probably thinking of a malicious software program employed by cyber criminals to gather log-in credentials, modify systems, steal data, and more.

You’d be surprised how easy it is for cyber criminals to gain access to your network for information.

It can be as simple as tricking an employee of yours into clicking on an attachment in an email.

Not all breaches are the result of a criminal actively trying to breach your network, however. Data breaches can also often be a result of human error on the part of you or an employee, rather than a malicious software attack.

Do any of your employees work on a laptop that could be forgotten at a coffee shop? What if there was a break-in at your office? Your sensitive client information and proprietary business data is there for the taking.

If you’re the victim of an intentional or unintentional breach, cyber liability insurance is there to help you recover.

What is Cyber Liability Insurance?

Designed to help your business recover should it suffer from a data breach or cyber attack, cyber insurance can help cover your financial losses. Costs can add up quickly, including those for system and data recovery, money lost due to reputation damage, or income lost during the recovery process.

Additionally, clients whose information is put in the hands of cyber criminals may take you to court if they feel you’ve failed to protect their information. And this litigation can get very expensive.

Cyber insurance includes third-party coverage that can help cover your liability to clients or customers whose information has fallen into the wrong hands, covering:

  • Customer notification
  • Credit monitoring services
  • Defense costs, settlements, and judgements for liability lawsuits

But third-party issues are far from your only concern. What about getting your systems, and reputation, back up and running?

Cyber liability insurance also helps cover restoration costs for:

  • Data recovery
  • Restoring computers
  • Reputational recovery

Coverage that will help your business with costs for the immediate effects of a data breach or cyber attack, cyber liability insurance covers systems restoration, PR and reputation management, electronic data restoration, and business interruption.

Are you prepared if a cyber criminal sets their sights on your business? Protect your reputation, your sensitive third-party information, and your bottom line with a cyber liability insurance policy.

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