cyber liability insurance
CoverLink Staff No Comments

Unfortunately, a reality of modern business is that it is not a matter of if a cyber attack will happen to your company, but instead when it will happen. Yes, this is a serious issue that is more often than not disregarded or underestimated by the small business community.

Despite popular belief, small businesses are a particular target for cyber attacks, no matter what industry you find yourself in. Some of this has to do with a lack of knowledge and preparation on the side of the business. This is why cyber liability insurance is so important for all businesses, no matter your size. Here are some of the numbers:

As these statistics demonstrate, cyber security is a serious issue for today’s small business world. Aside from these numbers that emphasize how widespread the issue is, business owners are also often surprised by the high cost of a breach if it were to happen.

The Cost of a Small Business Data Breach

The staggering cost of a cyber crime often shuts a small business down. As an article in Security Magazine recently shared, “The average cost of recovery from SMB data breaches is $36,000 and can even lead to a loss of $50,000.” Sometimes this number is even higher if the breached data gets into the wrong hands.

A recent particularly bad example in our area occurred when a local teenager hacked a small business and stole social security numbers and bank account data from customer accounts. The teen sold this information to an online company that used the data to create false identities for criminal use.

This small business incurred customer notification and credit monitoring costs, legal expenses, and damages from potential lawsuits resulting in more than $500,000 in damages.

Some damages and costs are not monetary. Often a breach causes considerable damage to your brand and business reputation as well. Many of your customers may terminate your services or no longer frequent your business after an attack. In addition, payment card companies may no longer want to work with you to provide customer card services.

The Most Common Types of Data Breach Claims

Aside from educating yourself on the security threats out there and taking steps to fortify your business, one of the best things you can do to protect yourself is to get cyber liability insurance. By getting the right cyber attack insurance policy, your small business receives a sense of security in case of an attack. The following are some of the most common types of cyber liability policy claims:

  • Stolen laptops or computers
  • Rogue employee that steals data or equipment
  • Spyware virus
  • Dumpster Diving data breach
  • Data theft extortion
  • Improper equipment disposal leading to breach
  • Reputation harm and public relations costs due to a breach

To get a more complete list, including examples of each of these types of claims, check out our free Cyber Liability ebook below.

A Practical Guide for Data Breach Prevention

So what can you do as a small business owner to help prevent a cyber attack? We have laid out all the threats and costs and now it is time to give you a practical guide that will help you feel more secure in your data security. Here are our top 10 tips for cyber breach prevention:

  1. Conduct a comprehensive review of all your data systems and their levels of security. What do you already have in place and where are your security gaps?
  2. Encrypt all data on all of your business systems as well as wireless transmissions.
  3. Keep all of your software and systems up-to-date. Uninstall any software that is no longer in use.
  4. Ensure that all employee computer accounts do not have administrative privileges.
  5. Prepare an incident plan for when a cyber attack occurs.
  6. Back-up important data from all computers on a monthly basis.
  7. Disable and wipe all old user accounts.
  8. Educate and train your employees on cyber security and appropraite social media use.
  9. Take steps to guard against email spam.
  10. Get cyber breach insurance that is tailored to your particular business needs.

It is our hope that this article provides you with a good place to start your cyber security enhancement. However, when considering cyber liability insurance as part of your action plan, it is important to consult an expert in data breach insurance to understand all your business needs.

An independent insurance agent can draw up the right policy for you that will give you the coverage you need while not incurring any unnecessary costs. Such an insurance agent can also compare many different insurance companies and find the best premium and coverage for you. Since they are independent, these agents are not pressured to push any one company’s agenda or policy. This kind of thorough preparation is worth the effort!

Tim O’Rielley from CoverLink Insurance notes the benefits of being well prepared for a breach:

“We’re seeing a massive spike in the number of cyber attacks and data breach claims, with most occurring to small businesses. Those businesses that have the adequate coverage in place are able to respond 73% quicker compared to those with no coverage. And the expedited response time is directly correlated to the overall cost the business incurs as a result of the breach.”

Many of our partners and clients in Ohio have gone through the process of evaluating their cyber security or have even experienced a cyber attack of their own.

Are you one of these people? Do you have a cyber attack prevention tip? Share it with us in the comments section below to help make our whole community safer.