Your business likely has protections in place for natural disasters like floods and fires, as well as coverage for worker’s compensation and employee liability, among others. But are you covered in the event of a data breach?
According to Forbes, 83% of small businesses won’t be able to financially recover from a cyber attack, and 91% don’t have any type of cyber liability insurance. The fallout of a breach can include the loss of customer trust, lawsuits, legal penalties, a mass exodus of vendors and business partners, and the company’s eventual (or swift) demise.
The Threat to Small Businesses
You might believe that hackers only go after large companies or governments, but small businesses are much more common targets. Most small businesses don’t have the robust security that major organizations put in place, meaning it’s worth a scammer’s time to break into multiple small companies rather than a few huge ones.
The Value of Cyber Liability Insurance
Even if your business has the latest protections, a round-the-clock IT department, and a well-trained staff on alert for possible scams, bad actors can still penetrate your security measures. This is why cyber liability coverage is essential. Regardless of the strength of your defenses, public opinion is hard to win back after those defenses are breached.
What Can Cybersecurity Insurance Prevent?
Getting cybersecurity coverage can protect your business from:
Financial Loss
After a cyber attack, your company will likely have to pay fines, cover legal fees, and suffer interruptions in the course of your business. Cyber liability insurance can prevent these costs from ruining your company.
Reputation Destruction
Data breaches can ruin the trust built between a business and its customers. Cyber insurance often provides reputation management services to restore and maintain that trust.
Loss of Data
Customers aren’t the only ones who lose information. Companies rely on data to continue functioning, and if that data is stuck behind ransomware or has been corrupted, it can be devastating. With cyber insurance, this information can be recovered.
Long-Term Legal Issues
Whether a business faces lawsuits or regulatory penalties, the costs and lost time associated with such legal issues can cause irreparable harm to a company. With the protection and coverage of cyber insurance, companies can get assistance with defense and court costs, fines, and settlement payments.
How Can You Tell You Need Cyber Liability Insurance?
Nearly every business these days has some sort of online presence, even if it’s a single social media account. Unless your company operates completely off-grid and only accepts cash payments, you use the internet to interact with customers in some way. Here are some signs that you should consider seeking coverage:
You Store Customer Information
If your business handles PII (personally identifiable information) or PHI (protected health information) in any way, whether that’s storing it, receiving it, sending it, or collecting it, you should consider cyber insurance.
You Accept Online Payment
Businesses that allow online payment, whether card processing is internal or outsourced, are at risk.
You Work in a Regulated Industry
Industries such as education and healthcare have strict rules about information storage and handling. With so many failure points, from employees to paperwork to servers, cyber insurance can prevent a breach from causing a company catastrophe.
Your Data Is a National Security Risk
Businesses that partner with government agencies such as the Department of Justice must adhere to strict cybersecurity rules. Cyber insurance can keep your business from buckling under penalties and fines in case of a breach.
You Have a High Number of Employees
Hackers don’t just attack firewalls and digital access points; they target key staff. They may call and ask for passwords, pretend to be someone higher up in a company, or leave malware-ridden thumb drives in strategic locations.
The more employees your company has, the higher the chance that one of them will become a target. With a cybersecurity insurance plan, you can prevent a single staff member’s actions from sinking your business.
Defending Against Cyberattacks
Regardless of insurance coverage, businesses should strive to prevent cyberattacks in the first place. Here’s how you can keep hackers from breaking in and stealing your data:
Use Firewalls
Don’t use unsecured networks for business purposes, and make sure to install firewalls on all ports.
Update Computers
As software ages, its weaknesses become common knowledge. Hackers can take advantage of the security holes and break into systems. Thankfully, software developers also identify these security holes and patch them with updates.
However, it’s up to users to ensure they download and install these updates. Businesses should regularly update operating systems, industry-specific programs, and anti-virus software.
Train Staff
Employees should go through cybersecurity training to identify possible threats. They need to look for suspicious emails and attachments, avoid using found USB drives, and only share passwords or login information with approved personnel.
Use Multi-Factor Authentication
Multi-factor authentication provides extra layers of safety by requiring multiple pieces of evidence when logging into sensitive applications or websites.
Run Drills
Test your security systems to make sure they can repel threats. When a security weakness is identified, address it to keep it from being a real-world entry point for hackers.
Inform Your IT Department
The IT department exists to keep your computer systems safe and operational. When you or your employees notice a possible security threat, whether it’s a suspicious email or phishing attempt, report it to your IT department immediately.
Protection for You and Your Business at Garrett Insurance
A cyberattack shouldn’t be the end of your company. Bad actors may be interested in stealing your sensitive data, but Garrett Insurance can offer you coverage that provides the peace of mind you need. Contact Garrett Insurance for a customized quote today.
