In the 21st century, companies are vulnerable to hackers who steal their information, corrupt their data, and cost them millions annually. How much does an average breach cost, though? Different estimates have stated that leaked/breached information costs companies 4-8 million USD per incident! Since the emergence of the coronavirus pandemic, these incidents have become widespread. According to rough estimates, one-fifth of businesses are targeted by cybercriminals, whereas 60% go out of business six months after the incident. So, how do you protect your profitability in this digital age? Besides cybersecurity, another solution involves cyber liability insurance for small businesses.
Business Benefits Of Cyber Risk Insurance
We've maintained that cyberattacks lead to data loss/damage. So, cyber risk/liability/security insurance protects companies from financial challenges ensuing from these cyberattacks. In 2020, Swvl suffered an attack in which cybercriminals stole thousands of customers' information. If the damage reaches other people's networks, they can file a lawsuit against your company. But you can solve all these problems by getting yourself cyber-insured. If you are insured, then it'll be easy to respond to these attacks.
So, which areas does this insurance cover for small businesses? It covers damages suffered by a business, including data recovery, identity recovery, and investigative services. So, you can recover your precious information stolen/damaged by hackers while acquiring control of your identity again. Thus, you don't have to worry about repair/recovery costs after a cyberattack.
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There are several benefits of getting this policy. Therefore, we'll explain here why small firms should invest in cybersecurity insurance in 2021.
- Data breach coverage:
After data leakages/breaches, companies have to update their security measures, recover data that has been hacked, and face legal repercussions from concerned parties. Experts estimate that some 58% of companies with 1,000 employees have experienced such breaches. Therefore, cyber security insurance makes sure that you're well-protected against the consequences of data leaks. It includes coverage for these possible exposures, thereby helping your company during such cyber-accidents.
- Notification reimbursements:
Companies that store/process customers' data are legally obliged to notify their clients after a detected data breach. Informing people isn't an undertaking you can fulfill cost-effectively. It costs millions of dollars to notify consumers, so being cyber-insured can help your organization bear these losses. These notifications ensure that customers don't lose their identities after being hacked by cybercriminals. Thus, getting cybersecurity insurance reimburses you for notifying your clients.
- Adequate coverage:
Many companies mistrust cybersecurity insurance without realizing they're insured in the first place. A Sophos survey reveals that 36% of insurance policies don't even cover ransomware which constitutes the leading reason why companies seek coverage. So, you should acquire a policy after carefully considering which cyberattacks they're protecting you from! As we observe different techniques used by hackers to infiltrate your networks, a cyber risk insurance policy needs to cover all potential threats. It allows businesses to remain well-protected against potential cyberattacks.
- Lost devices:
Many organizations suffer from lost/missing hardware appliances (laptops/computers). Even though these devices aren't worth much, the data they contain may cause financial instability. Therefore, it isn't risk-free getting your devices accessed by unauthorized personnel. So, cyber liability insurance allows companies to endure the loss of their devices since this stealth leads to the exposure of their sensitive/confidential data. There are many instances of hapless workers connecting to public wi-fi on company hardware and giving hackers access to these devices. So, get your stuff cyber-insured.
- Cyber extortion defense:
Many hackers steal a company's information and blackmail that organization. They withhold crucial information and continue blackmailing until a ransom is paid. That's why business companies need to acquire cybersecurity insurance that provides cyber extortion coverage. This clause enables them to benefit from several services ranging from monetary disbursements to recovering lost/damaged data. As a result, if you've handed up your money to extortionists as a result of a hack, this coverage will cover your losses. From external hackers to employees stealing your information, this policy covers different problems. Now, you can recoup losses caused to you by digital extortion.
- Income loss coverage:
Besides the monetary ramifications of the attack itself, data breaches cause business interruptions (i.e., a temporary shutdown). These interruptions lead to companies losing their income. No wonder many smaller businesses have gone bankrupt after these incidents. Moreover, companies observe diminished people's confidence in their services and lose customers. We've Uber's example when it suffered a breach in October 2016, discovered it in November, paid hackers to keep them silent, and finally admitted the breach in 2017. So, cyber liability insurance covers lost income due to customers leaving your company and the reputation being tarnished online during the commercial recession.
- Forensic support:
Companies frequently hire cybercrime professionals to avoid further attacks once hackers have infiltrated their networks. Because a business only has a limited amount of time following a data breach to acquire all essential evidence. So, experts conduct a forensic assessment to investigate the extent of the breach and its potential ramifications. So, cybersecurity insurance covers these costs as well. Specific policies even offer unlimited support from some cyber specialists, thereby enabling businesses to survive the consequences of a data breach. That's why it's advisable to get your company cyber-insured to avoid such incidents from harming you!
- Legal support:
In August 2021, a lawsuit was filed by T-Mobile after hackers tried to sell the information related to their 100 million customers on the dark web! From Nintendo to Microsoft – several companies were victims of data leakages/breaches in 2020. While these multinational corporations aren't affected by lawsuits, smaller businesses can't tolerate legal action against them. Even though many data breach lawsuits fail, ones that progress deadly cause results! In 2017, Target had to pay over $18 million to settle data breach cases against the retailer. So, getting yourself insured against cyberattacks will ensure that you get foolproof legal support against any emerging lawsuit.
During an ongoing pandemic, the world's also suffering from rapidly-changing cybersecurity challenges. As technology evolves, hackers have also morphed their techniques. Companies utilizing traditional and old-fashioned strategies to combat these challenges should consider adopting better methods. One of these methods involves getting cyber liability insurance to cover data repair/recovery costs and prevent lawsuits from hurting your company's reputation. This insurance pays for regulatory fines, the income you've lost, and any ransom you must pay to gain access to your data. So, companies that store/process people's sensitive information shouldn't neglect investing in cyber security insurance immediately.