Is Cyber Liability Insurance Worth It for Small Businesses?
In recent years, businesses of all sizes and sectors have become increasingly dependent on technology and the internet. Online systems and solutions can provide convenient, cost-effective ways of handling everyday tasks and large-scale projects. But organizations must be aware of the inherent risks and exposures they bring. Any business that relies on stores or transmits information online should understand the benefits of cyber liability insurance.
What Is Cyber Liability Insurance
As its name suggests, cyber liability insurance, also known as data breach insurance, provides financial protection for businesses affected by cyber incidents. This coverage can cast a wide safety net by potentially helping to pay for various expenses and damages arising from cyber incidents, such as the following:
- Breach response costs—This may include investigating the incident, notifying customers, fraud and credit monitoring services and compliance fines.
- Extortion payments—Cyber criminals who gain access to data or systems may demand a ransom before releasing control of systems or agreeing not to release sensitive information.
- Business interruption costs—If a business’s ability to conduct its normal operations is interrupted by a cyber incident, this coverage can provide financial assistance for resulting costs, such as hiring additional staff, renting equipment and recouping lost income.
- Legal expenses—Cyber incidents that affect a company’s clients, partners or other third parties may lead to lawsuits. Cyber liability insurance can help policyholders pay for their legal defense, as well as settlements and judgments.
Do Small Businesses Need Cyber Liability Insurance?
In the era of technology and internet connectivity, cyber liability is an integral component of any business’s insurance portfolio, regardless of its size. In fact, a recent study by global professional services company Accenture found that 43% of cyberattacks are now aimed at small businesses. Furthermore, a study by the research center Ponemon Institute discovered that 66% of small- and medium-sized businesses had been targeted by a cyberattack in the previous 12 months.
While cyber criminals may have begun turning their attention toward small companies, such targets may lack the financial security of larger organizations. Paying out of pocket for the fiscal consequences of even a single cyber incident could have irreparable ramifications for a business’s finances and future.
We’re Here to Help
At McCartan Insurance Group, our agents have over 15 years of experience working with clients in West Des Moines, Urbandale and throughout Iowa. We will work with you to analyze your unique circumstances, assess your insurance needs and craft optimal coverage.
Visit our website or call 515-633-2273 to get started.
This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.
Categories: Cyber Liability Insurance