Is your small business protected against cyber-attacks? Do you feel like you just can’t afford to pay for security measures? Well, the better question may be, can you afford not to invest in security measures?
As computer technology becomes more and more critical in the daily operations of most businesses, the threat level grows. Many small business owners are investing in the financial protection and risk management services available through cyber insurance policies.
Small Businesses Become Targets
Small businesses have become targets for cyber-attacks and there are several reasons why. First, they’re less likely to have dedicated cyber security teams than their larger counterparts, so hackers consider them an easier target. Similarly, a lot of small businesses don’t have the staff to update their software regularly, potentially making them vulnerable to threats that larger companies have addressed.
And because a lot of small companies provide services to large enterprises, they’re often targeted by hackers to get past the large company’s cyber defenses. In fact, many large companies now require cyber insurance in their contracts with smaller service providers and vendors.
Beyond hackers, cyber liability risks can emerge if data is disclosed because of employee error, a phishing or identity theft incident, or someone losing a laptop or phone with customer data stored on it.
In addition, traditional liability policies are designed to respond to physical risks, not digital ones. Your business owners’ package (BOP) or general liability policies will, for example, exclude coverage for cyber-related risks (unless cyber coverage has been added to a package policy).
If you consider all these risks, cyber insurance can be a smart investment for any company that conducts business, stores data or accesses information online – which is pretty much all of us, right?
Understand The Coverage
While coverage and costs can vary according to a company’s size and industry, insurance tends to cover one of two forms (although some packages will combine both):
- First-party insurance will cover direct costs associated with a breach. These may include the costs of notifying customers (which is required in many states), loss of income from a breach, and costs of replacing vulnerable technology. Policies may also cover the costs of investigating an incident, crisis management expenses, and cyber extortion costs.
- The third-party coverage will cover defense costs if someone sues your company following a breach, settlement expenses, court-ordered damages, and related expenses.
1st Source Insurance offers cyber coverage, and we would love to talk with you if you have any questions. Please give us a call at 574-271-5200
Regardless of the size of your company and the nature of the information you process or store, cyber insurance is worth discussing with your insurance professional to make sure your risks are being mitigated effectively.