In the Internet-dominated business arena we have found ourselves in, most companies retain more sensitive information than ever on their computers. But a worrying low number of small businesses have invested in cyber liability insurance to combat the potentially devastating effects of a cyber-attack.
In fact, many small business owners are unaware of the potential high risk data breaches at their establishment,
Several small companies believe that most cyber-attacks are only on high-profile, high turnover firms which is not the case.
It’s obviously more news worthy to report the large cyber-attacks than the small ones that frequently violate small businesses systems and data
Regardless of a company’s size or industry, business owners must act to secure their customers’ valuable data against the possibility of a cyber-attack. In addition, investing in cyber liability insurance protects your assets should such an event occur.
The high costs of data breach recovery.
When hackers can access company databases, they become privy to a vast array of information, including customers’ credit card numbers, addresses and other identifying data.
They also gain access to other sensitive data, which they can use to open accounts, steal money and ruin the affected individuals’ credit. Recovering from a data breach can cost thousands of pounds in fines and lost reputation.
Such expenses can often include:
• Business interruptions. Not only must hacked businesses often close their doors while they investigate the source and impact of data breaches, they also suffer from decreased sales due to negative publicity and diminished customer confidence. The days or weeks a firm spends out of commission represent lost profits and opportunities.
• Security overhauls. Updating or implementing a new security system costs a great deal in software, infrastructure and personnel. It also requires training staff in new policies and procedures.
• Ransom demands – Some businesses affected by data breaches are sometimes required to pay a ransom demand to avoid any further attempts and threats, this figures can range wildly depending on the affect a breach has and the severity of the attack
• Bankruptcies and business closures. It’s also the case that several small businesses have to shut down within a few months of a data breach. From stolen resources to the expense of responding to a cyber-attack, these incidents have the potential to deplete the savings of the most promising small business.
Though cyber-attacks can have these and other grim consequences for your company, cyber liability insurance provides valuable resources to help regain what your business may have lost.
Cyber insurance and how it can support your business.
Like other types of coverage, cyber liability insurance covers policyholders in the event of a specified loss – in this case, a cyber-attack. As the popularity of cyber liability insurance increases, policies are available at prices any size of business can afford, from small startups to multinational corporations. Representing a small percentage of a company’s annual insurance costs, this product comes at a low premium in comparison to the potential repercussions of a data breach.
Including cyber insurance as part of an overall security strategy.
Regardless of the size, age, industry or number of customers your company possesses, investing in cyber liability insurance may be crucial if you store sensitive data online. However, you should also recognize that insurance will not prevent a data breach from occurring.
To protect themselves most effectively from cyber-attacks and their devastating consequences, companies must incorporate cyber insurance into an overall security strategy that includes substantial security safeguards and a decisive incident response plan.
Although the rise of e-commerce and virtual data storage means limitless opportunities and convenience for businesses of all sizes, the threat of data breaches requires companies to use every tool at their disposal to protect their data and livelihood.
Because it covers expenses should the worst occur, cyber liability insurance is a necessity in any business security plan.
Does your company’s data breach response plan include cyber liability insurance, if not then you need to be discussing this with De Novo Risk Solutions, pick up the phone and speak with one of our advisors on 0800 0834933