Does your Business need Cyber Security Coverage?
Today’s reality is that a cyber invasion is an eventuality, not a possibility. Cyber attacks constantly happen within businesses, and it’s a constant struggle to stay ahead of the curve when protecting your digital space. As a business owner, you know about general liability and property coverage as they are a part of a standard commercial insurance policy. But as cyber risks become more frequent, what was considered ‘standard’ may have changed as the likelihood of a digital attack is a bigger concern than ever for businesses large and small.
All sectors of businesses are under attack, but smaller businesses have proved to be higher targets. This is because small businesses have fewer resources and commonly less awareness of the dangers of the cyber world. During the COVID-19 pandemic, an unprecedented security threat emerged as people began to work from home. This remote environment led businesses to allow employees remote access to their servers, exposing them to attacks from methods such as trojan horses and phishing. Alessandro Profumo said at the Cybertech Europe 2022 conference in Rome that cybercrime cost the US in 2021 six trillion dollars.
What is Cyber Risk
Cyber has become a rather ambiguous term in today’s data age. When we reference cyber, we refer to your computer, electronics, network, data processing and transferring, for example. Cyber risks can include data breaches, privacy breaches, and/or computer attacks. Our reliance on digital devices has left businesses vulnerable as we continue using shared cloud computing networks such as OneDrive to stay interconnected with clients or co-workers. Data is a lucrative commodity for criminals because of the value it has to a business, and using phishing attacks is an easy way to steal. Typically the main causes of a data breach are malicious attacks, security system glitches, and human error.
Impact of a Cyber Attack
The cost of putting the pieces together after a data breach can devastate any business, but particularly small businesses. As the owner, you may also be liable to customers and other businesses and have to pay restitution. Notification costs to clients and other companies, such as third-party vendors, can add to the expense. A standard business insurance policy doesn’t cover cyber risk traditionally. However, some policies offer cyber risk or cyber security coverage as an add-on. In other cases, a standalone cyber risk policy may be a better way to protect your business.
Risks Cyber Insurance May Cover:
- Data breaches
- Data recovery
- Cyber extortion
- Business interruption
- Computer attacks
Your coverage can also protect your business against liability to others. Consider the following:
- Legal defence costs
- Legal settlement costs
- Damage to other networks or computers
How to Protect your Business
Understanding your environment is your first step in determining your cyber risk. Consider how to protect, detect and respond in the event of a data breach when determining your risk strategy. Schedule regular maintenance for your network, review your antivirus protection and ensure you and your employees are trained on the latest cyber threats.
Ask your broker about adding cyber security to your policy. While many businesses are similar within the same industry, your business is unique. Having a broker help you review your security measures and determine your unique exposures will give you the peace of mind that you are protected if the worst occurs. Together, you can build a customized solution that protects your business and fits your budget. The first step in protecting your business is to have a candid conversation.