Cyber breaches that affect big businesses make the news, but over 60 percent of all cyber breaches target small and medium-sized businesses. Because you must protect your business, no matter what its size, purchase adequate cyber liability insurance.
What is Cyber Liability Insurance?
When your business suffers a data breach, you can file a cyber liability insurance claim. The policy won’t prevent a hack, but it will cover your financial losses and assist your company during recovery.
Common Cyber Breach Risks
Any company, from international mega corporations to small family-owned businesses, that operates online or handles customer data faces cyber breach risks such as:
- Human error – using the same password for all websites, losing unlocked devices or downloading malware.
- Mobile devices – gateway for thieves when used over unsecured Wi-Fi connections or left unlocked.
- Disgruntled former employees – use old login information to hack into your system.
- Ransomware – hackers introduce malware onto your computer, encrypt data and require a ransom before they release and decrypt your system.
- Coordinated attacks – international hacker groups target the sensitive information your company stores.
How Much Does a Cyber Breach Cost?
After a cyber breach, your company will owe first-party expenses, such as damages to your systems and data, and third-party expenses related to your liability to customers. Examples of these two expenses include:
- Customer losses – direct financial loss, credit monitoring and other related expenses.
- Business disruption expenses – account for up to 39 percent of a breach’s total cost.
- Direct financial loss – resources the hackers steal from your company bank accounts.
- Legal costs – handling lawsuits customers may file against your business.
- Regulatory fines – imposed by the FCC, FTC, HHS and your state.
- Public relations expenses – required to rebuild your company’s reputation.
These and other expenses contribute to the $3.62 million global average cost of a cyber breach. Each breach affects an average of 24,000 records, reports the Ponemon Institute, and costs $141 per individual lost or stolen record. Multiply this figure by the number of confidential or sensitive records your company stores, and you get an idea of how expensive a breach would be for your business.
Purchase Adequate Cyber Liability Insurance
Many experts suggest that businesses purchase at least $1 million in cyber liability insurance. Without this valuable coverage, your company could face insurmountable financial challenges and possible bankruptcy after a cyber breach.
On average, small businesses pay from $750-8,000 per year for this valuable coverage. Because your needs vary, schedule a consultation with your insurance agent and get a detailed quote.
Protect your customers and your business with cyber liability insurance. It’s essential coverage for every company.