Cyber Liability – What’s At Stake?
The tremendous increase of hacking and phishing has created a security challenge for businesses. No business, whether you’re a small business or a large retailer like Target—is immune. Hackers are even compromising some of our most secure U.S. government agencies. The big hacking attempts like Target and government agencies are the ones that make the news, but did you know that most cybercrime happens to small and medium businesses? In fact, one in five businesses are victims of these crimes each year, according to the National Cyber Security Alliance.
All kinds of malicious cybercrime can occur, from gaining access to your system records to transferring funds away from your accounts. Medical practices around the country have to battle with hackers stealing their patients’ private health data. Unfortunately, the hacking leaves devastation at the company, and over half go out of business within six months post-attack. There’s a huge data recovery cost, and then the inevitable intangible costs of damaged reputation, lost business and even potential lawsuits. It’s usually too much, and the company goes under.
Most small businesses are easy targets. They don’t have the knowledge or funding to implement the IT systems necessary to protect against the ever-changing cyber threat. You can protect yourself with cybersecurity liability insurance policies. Coverage is available nationwide and includes coverage of IT forensics costs if you do have a security breach. This type of insurance also covers legal fees incurred after a breach and coverage for damages paid to third parties. It also covers expenses you incur in notifying customers of a breach, as well as comprehensive coverage to handle business interruption expenses including income loss. Some insurers even cover harm to your reputation and credit monitoring. It’s also important to know that insurance companies don’t do a particularly good job at certain areas, like intellectual property theft or coverage for reputation damage or business downturn.
The damages of cybersecurity are far-reaching and it is difficult to protect against every possible scenario. The best approach is to identify your top assets and insure that risk. Regardless of what or how much you choose to insure, policies of this nature are a smart risk-management strategy because they transfer some of the financial risk off your shoulders and onto the insurance company.
In addition to having the cybersecurity policy, you should always take steps to fortify your business against cyberattacks. We can help provide tips and suggestions for you. If you’d like to learn more about how to protect your business contact us today.