4 Compelling Reasons To Consider Cyber Insurance

Insurance Blog

Reliance on internet and computer-assisted technology is a must for any small business. Computers help store client information, track sales, and provide instant digital access to any information your business needs to function and expand.

Unfortunately, along with benefits come many risks associated with cyber-crimes. Experts estimate cyber-crimes resulted in losses amounting to $2 trillion so far in 2019. Additionally, small businesses are the target of half of those cyber attacks. Here are four compelling reasons to consider cyber business insurance for your small company.

1. Protect Sensitive Client Information

Customers want to know their information is safe from theft or leaks. Security is important whether it's simple address and phone number lists for a florist or personal details regarding financial records at a law firm. Clients that feel their private information is at risk may transfer their business elsewhere. In very competitive small business markets, new business acquisition and client retention is crucial to survival and growth.

2. Protects You From Additional Expense

You want to invest any extra revenue toward growing your business. Unexpected expenses or costs that exceed your budget are crippling, and cyber-crime can be expensive. Cyber insurance can help absorb costs associated with data breach and recovery like:

  • Legal fees and settlements
  • Data analysis
  • Credit monitoring
  • Forensics investigations
  • Public relations
  • Regulatory fees

Keep in mind that without cyber insurance, these costs would normally fall upon you and your small business.

3. Supports Existing IT Capabilities

Your business information technology department may be a dedicated team or consist of only yourself. Computers, storage, and networking devices need regular analysis to check for privacy and security risks. While cyber insurance is not meant to physically protect your electronic data, it helps in other ways.

When something goes wrong despite your efforts and electronic data is at risk, you can rest assured you have protection from a good cyber insurance policy. Many policies are designed to cover software and hardware loss in the event of a breach.

4. Enhances Your Existing Liability Coverage

Basic business insurance covers physical structures as well as liability protection. Liability coverage aims to protect you from negligence or personal and property damage you and any employees are found responsible for.  However, your liability coverage may not specifically include cyber liability.

Fortunately, cyber insurance closes this gap and enhances your existing liability coverage to include cyber liability. For example, a customer sues you when cyber criminals hack your computer and expose their personal data to the public electronically.

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