A Check Point Research report issued in 2021 found cyberattacks had increased by 75 percent over the previous year. This is just one of several reasons cyber insurance can be a smart coverage option for businesses. While it’s often the larger-scale data breaches that grab much of the spotlight, smaller businesses can benefit just as much from cyber insurance as larger or mid-sized ones. Below, we go over the basics and benefits of cyber coverage for small businesses.
The Basics of Cyber Insurance
Cyber insurance is a type of liability insurance meant to provide protection against losses stemming from cyberattacks. With standard coverage, cyber insurance typically protects against losses from:
• Digital extortion
• Viruses and malware attacks
• Privacy breaches
• Denial-of-service (DoS) attacks
• Website hacks
Cyber insurance also typically extends to protection for a business’s customers who may be impacted by a data security issue. Additionally, coverage may apply to related legal costs associated with a data breach, expenses related to recovery from cyberattacks, losses stemming from poor cybersecurity practices, and costs associated with patching and updating systems to protect against future data theft issues.
Policies & Add-Ons Tailored to the Needs of Small Businesses
Some business insurance providers offer cyber insurance coverage specifically tailored to the needs and concerns of small businesses. Supplemental add-ons are sometimes available as well. A popular related option is a crime policy that offers protection against such things as physical workplace theft. Software and product liability insurance are other possible add-ons, and they offer protection for any internally developed software or hardware products.
Difficulty of Handling Ransom Demands
It’s not unusual for cyber attackers to demand ransom in exchange for restoring access to important data. Larger companies often begrudgingly pay these ransoms to avoid significant disruptions to business operations. It’s less likely for smaller businesses to be able to handle losses from ransom demands. Having extortion coverage, which covers losses related to ransom demands, minimizes the related financial strain.
Low Cost of Cyber Insurance
According to IT Business Edge, the cost of cyber insurance is generally low. This makes it affordable for many smaller businesses looking for added peace of mind without overstretching already limited budgets. The savings are especially noticeable given the many benefits associated with standard cyber-related coverage. It’s for this reason many mid-size and smaller businesses opt to obtain coverage of this nature, especially in today’s digital world.
Small Businesses Benefiting Most from Cyber Insurance
Cyber insurance is optional and not an absolute necessity for all small businesses. That being said, certain smaller-scale enterprises tend to benefit more from cyber-related protection. For instance, small online-based e-commerce businesses that accept credit cards are more susceptible to data breaches than smaller businesses primarily earning revenue from in-person purchases. Other types of small businesses likely to be benefit from cyber insurance include ones with operations involving:
• Significant information technology
• Software and related support services
• Private or confidential client, customer, or employee information
• Online-accessible products or services
In today’s online-centered world, you need to work with experts to ensure your business is covered against all types of losses, including data breaches. Look to the professionals at Altra Insurance Services for sound advice based on years of experience in the insurance industry. In addition to business insurance, we offer reliable homeowners, renters, and Auto & car insurance in National City Their business owners should call one of our friendly agents today at (619) 404-6311 to discuss their insurance needs.