In today’s world, it’s nearly impossible for a business to function without technology and the internet. With valuable data being stored and transmitted online and more products being connected to the internet, companies are increasingly finding themselves susceptible to cyber attacks. No matter the size of your company, having an insurance policy that specifically protects your business against cyber-liability risk makes more sense than you might realize.
The 2018 Travelers Risk Index indicates that one in five companies have suffered a cyberattack, and that rate has doubled since 2015. According to a recent USA Today article on cyber security, it’s estimated that more than 90 percent of small businesses do not use any form of data protection for company and customer information. Hackers have taken note, with more than 70 percent of cyber attacks targeting small businesses. Do you still feel like a cyberattack won’t happen to your company?
What’s at Risk?
In order to understand the importance of cyber-liability insurance, you need to be aware of the types of threats on the horizon. Cyber attacks come in many forms. The three most common are security breaches, unauthorized access to financial accounts, and system glitches. But you also have to guard against threats such as cyber extortion, phishing schemes, and hacking into operational systems, as these are on the rise. This amounts to broad risk for any company.
Even the smallest businesses store troves of valuable data on physical servers or online in the cloud such as banking information, customer credit cards numbers, Social Security numbers, passwords, customer lists, vendor information, and much more. One wrong click by an employee and all this valuable data can fall into the wrong hands.
As you can imagine, the consequences and financial implications can be dire. Your customers will lose faith in your business, and you could find yourself defending against a lawsuit.
A Base Level of Security
Protecting yourself from the risk of cyber attacks begins with implementation of basic security practices. Here are a few best practices that will serve you well, no matter your industry:
- Regularly test your data security systems and
- Develop a data breach response plan that includes how you will notify customers, staff, the media, etc., of a breach.
- Train staff to spot the warning signs of a “phishy” email.
- Encrypt sensitive data.
- Enable two-factor authentication whenever possible.
- Don’t overlook the importance of physical security.
Protect Your Bottom Line with Cyber Liability Insurance
In addition to taking basic security precautions, purchasing cyber liability insurance will serve as a firm backstop and ensure that you won’t lose your business if a cyber attack does occur.
Carrying a policy alone will not completely mitigate the damage. The news of a security breach can certainly harm a company’s reputation, making baseline precautions all the more important. The goal in purchasing a cyber liability policy is to minimize the negative effects on your business and help you to get operations running quickly and with less financial hardship for your company.
If you’re interested in learning more about the risks at hand or your options for coverage, Peel & Holland can help. We recognize that your business is your livelihood and will help you evaluate your options and choose a cyber liability policy that makes sense for you, so that you remain protected in the event of an incident or breach.