Cyber Insurance: What It Is and Why Every Business Needs It

January 25th, 2019
Cyber Insurance: What It Is and Why Every Business Needs It

If you haven’t heard of cyber insurance or cyber liability insurance coverage, you’re certainly not alone. Although this type of insurance protection for businesses has been around since about 2005, many small and mid-sized company leaders have yet to be introduced.

This is mainly because over half of small business leaders still don’t understand the risks that cyber-attacks and data breaches present to their businesses. This is especially surprising, as 52% of businesses reportedly believe they will be cyberattack victims at some point!

Cyber-attacks and data breaches are expensive for ANY business

As we’ve talked about often here on the blog, cyber-attacks and data breaches can cause massive financial losses. When these attacks happen, they impact your business in multiple. Your team may be unable to work resulting in lost productivity and lost revenue. Your funds from your bank accounts could be compromised. Your sensitive information from your employees, vendors, and clients could be leaked.

Not only is that embarrassing, but essential business relationships could be damaged and you could even end up in a lawsuit.

Your business already has insurance to protect your building, inventory and other assets, so why wouldn’t you protect your data and try to mitigate all of the dangers of a cyber-attack? Remember it’s not a matter of “IF” you’ll get attacked, just a matter of WHEN.

Let’s take a look at the coverage you can purchase now that allows you to protect your business...

What cyber insurance covers

Since cyber insurance is still so new, you’ll find that different insurance policies may offer vastly different features. We recommend always starting with your business insurance agent first to help you explore the options available, but there are some standard protections you need to make sure look for.

  • Direct and indirect business losses – costs associated with things like network downtime and data loss recovery to managing a crisis situation and even repairing damage to your business’s reputation.
  • Investigations – it may sound like something from the movies, but your business may need to work with outside security firms or law enforcement agencies to fully understand how a cyber-attack or data breach occurred, what/who was responsible, and how to fix the damage, which can be costly.
  • Lawsuits – if a cyber-attack or data breach results in the loss of intellectual property or confidential information belonging to others, these individuals may sue you, which can be financially devastating without protection.
  • Extortion/Ransomware – while paying ransoms demanded by cybercriminals in order to recover your data is usually a bad idea, cyber insurance can help you recover losses associated with extortion attempts like these and others.

Cyber-attacks and data breaches really are a certainty!

The FBI’s Internet Crime Complaint Center (IC3) reported a 2,370% increase in just under two years (January 2015 – December 2016) of actual and attempted losses from email-based scams.

That’s incredibly scary! And it also goes to show that if your business hasn’t yet experienced a cyber-attack or data breach, it’s only a matter of time.

In fact, criminals are probably phishing your employees right now. And if you haven’t trained them on how to identify and properly handle email scams, you could be facing a very expensive accidental exposure of your business information very soon.

What’s your risk?

Have you performed a cyber risk assessment for your business? If the concept of cyber insurance is new to you, the answer is probably no. You’re still in the majority of small and medium-sized businesses at this point, but unfortunately, this is a necessity in our current cyber threat climate.

Also, critical to reducing your risk is building a strong cybersecurity culture in which everyone within your management team (aka your company’s biggest target for cybercriminals) needs to understand the risks and cybersecurity threats to your business’s health and well-being.

Just because you’re insured, it doesn’t mean you can ignore cybersecurity!!!

Even if you have good insurance for cyber-attacks and data breaches, ultimately your business needs to try to prevent these threats as much as possible. Cyber criminals are always looking for new ways to attack businesses, so everyone in your business needs to be focused on keeping the business protected from cybersecurity threats.

So, the name of the game in protecting your business (and not having to pay that cyber insurance deductible to clear up a disaster) is being proactive.

One very important word of caution… Be sure to work with a trained technology professional. Many clients who try doing it on their own, end up leaving their business exposed to security issues, cyber-attacks, and data breaches.

Need help? Antisyn is here for Jacksonville businesses

Antisyn is here to help for Jacksonville area businesses. Our IT services include full IT support, IT strategy, and cybersecurity services. Reach out to us and see how our passionate team can help your business.