Your Business Is At Risk From Added Cyber Attacks in the New Norm
There's a surge in cyber attacks in the new work environment. Small to medium businesses are shockingly the biggest target.
Your business policy may not cover liability from security, privacy, and operational risks or technology professional services.
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Why Does Your Business Need Cyber Insurance?
1. Data breaches are costly. Average cost of a data breach is $4 million and roughly 60% of small businesses close after a cyber attack.
2. Cyber incidents happen more often to small businesses. Nearly two-thirds of small to medium businesses have been the victim of a cyber incident.
3. Coverage works. Most businesses report that cyber insurance covered the cybersecurity incidents they suffered.
4. Uninsured companies believe they are well-protected. They feel that in-house security people and processes provide all the needed protection. Also, they think that their business liability policy protects them. Boy are they wrong.
Top Reasons Businesses Think They Don't Need Cyber Insurance
1. We don’t hold much in the way of sensitive data. Do you have employees? If you do, you will definitely hold sensitive data. Names and addresses, plus bank, health and HR records. Do you sell goods or services? If you do, every transaction will carry protected information such as credit card or bank account details, plus, of course, payment histories. In the wrong hands, this data could trigger costly repercussions.
2. I’m pretty certain our business liability policy will cover data protection. Business liability coverage is normally restricted to damage to physical property or bodily injury. Data is usually classified as non-physical property. This means you are unlikely to be covered for breach of contract (the number one cyber claim) or criminal acts.
3. Our business is too insignificant to interest hackers/ cyber-criminals. Hackers don’t just target well-known companies or brands. The National Cyber Security Alliance reports that every year one-in-five small businesses falls victim to a cyber-crime and roughly 60% of these go out of business within six months. What’s more data breaches aren’t always caused by hackers. They can be caused by simple mistakes, such as leaving a company laptop on a train or a smart phone in a cab. And nearly a third of cyber-attacks against SMEs come from disgruntled or dishonest employees.
4. We aren’t responsible for our data because we use an IT provider. Regardless of who actually holds the data – the company which collected it, is the company responsible if a data breach occurs. It is crucial to fully understand where your data is stored and how to react in the event of a breach. Cyber insurance can provide full crisis management including PR costs to help manage such events.
5. The cost of an incident would not be significant enough to warrant the premium. The cost of a breach can be far higher than you might think. There’s the emergency IT contractors to repair and reactivate your network and rebuild your security and the PR consultants to act to protect your company’s reputation in the short term. Not to mention the contractual or regulatory penalties you may face. Often, just having the guidance of the insurer in knowing who to turn to in these situations can prove invaluable.
6. Our IT manager is excellent. / We have state-of-the-art firewalls. Unfortunately, as we all know, even the most sophisticated networks can be hacked. Government agencies to multi-million pound games companies have had their systems breached or customer details leaked. You may not be a target for the same high-level hackers, but the statistics indicate that the majority of SMEs will face an attack at some point and the frequency of these attacks is on the rise. And, of course, there’s always human error, such as sharing passwords or forgetting to follow security protocols.
7. The cover is too expensive. Cover may be more affordable than you think. Our cyber expertise means that we can help you identify the risks you face and recommend solutions that remove, reduce or cover them. So you pay only for the cover you really need. Our panel of select insurers allows us to find the right insurer, with the right cover for your company at a competitive price. And our knowledge of the area means we can move fast! Client satisfaction is our lifeblood. It’s no coincidence that 98% of our clients renew with us each year, and that we’ve won a string of prestigious awards for great customer service.
What is Cyber Insurance?
A type of insurance designed to cover consumers of technology services or products. More specifically, the policies are intended to cover a variety of both liability and property losses that may result when a business engages in various electronic activities, such as selling on the Internet or collecting data within its internal electronic network.
Most notably, but not exclusively, cyber and privacy policies cover a business' liability for a data breach in which the firm's customers' personal information, such as Social Security or credit card numbers, is exposed or stolen by a hacker or other criminal who has gained access to the firm's electronic network. The policies cover a variety of expenses associated with data breaches, including: notification costs, credit monitoring, costs to defend claims by state regulators, fines and penalties, and loss resulting from identity theft.
In addition, the policies cover liability arising from website media content, as well as property exposures from: (a) business interruption, (b) data loss/destruction, (c) computer fraud, (d) funds transfer loss, and (e) cyber extortion.
What is Tech E&O Insurance?
Cyber and privacy insurance is often confused with technology errors and omissions (tech E&O) insurance. In contrast to cyber and privacy insurance, tech E&O coverage is intended to protect providers of technology products and services, such as computer software and hardware manufacturers, website designers, and firms that store corporate data on an off-site basis. Nevertheless, tech E&O insurance policies do contain a number of the same insuring agreements as cyber and privacy policies.
Advanced e-Financial Technologies, Inc. (AeFT) d/b/a PeoplesAlly Insurance Services is an online broker of insurance products and services. Policies are underwritten by third-party insurers (“Insurers”) that are not affiliated with PeoplesAlly Insurance Services. The insurers are solely responsible for future claims. PeoplesAlly does not underwrite any insurance policies as described on this site. Additionally, any insurance policy premium quotes or ranges displayed are non-binding. The final insurance policy premium for any policy is determined by the underwriting insurance company following application.
The information provided on this website does not constitute insurance advice. All content and materials are for general informational purposes only. Please complete PeoplesAlly's online application and contact one of our licensed insurance professionals to obtain advice for your specific business or personal insurance needs.
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