05 Jul Protect Your Small Business: Cyber Liability Insurance
Cybercrime is one of the most rapidly emerging, significant exposures to any business today. Both organized crime in the U.S., as well as foreign enemies, are hacking and stealing information from businesses in order to turn around and sell that information. According to the 2017 State of Cybersecurity in Small & Medium-Sized Businesses, 61% of small businesses experienced a cyber-attack or data breach in the last 12 months. Even at such a high threat level, less than 21% of small business have any type of data breach coverage.
This is exactly why every business undoubtedly needs some type of cyber liability coverage, or what we prefer to call “data breach coverage.” This coverage design is to protect an entity in the event that personal identifiable information has had access or a breach from a user without authorization or permission.
Think Your Business Doesn’t Need Cyber Liability Insurance? Think Again.
With more than 70% of cyber-attacks hitting small businesses, companies need to realize that it’s not just multimillion-dollar industries these hackers are going after. Small businesses are now a prime target since they’re less likely to have the infrastructure or security measures in place to prevent an attack. Whether this is due to a lack of budget needed to beef up cyber-security, or not believing anyone would want to hack them in the first place, the fact remains that even if the hacker obtains 30 personal information records, it’s a win for them.
Most business owners need to understand that they’re carrying customer information on some level, even if they’re using a third-party processing company for credit card payments. These processing companies write their contracts with a liability limit clause, meaning there is a limit to their liability to the contract amount. If you pay a third-party processing company $12,000/year, that’s all they’re liable for in a data breach situation. They’re not the ones on the hook – your business is.
On the other hand, maybe you’re not dealing with credit card numbers at all, but you do have 50 employees. You have their name, date of birth, driver’s license number, social security number, etc., and that information needs protecting as well.
What Are the Risks of Not Having Cyber Liability Coverage? Let’s take a look.
Unfortunately, small businesses don’t often have the means to recover from these types of breaches. They need to be able to lean on a policy. Without some type of coverage, these attacks have the ability to financially wipe their business due to the costs of cyber-crimes being so high and the damage being so significant.
Here are some startling statistics that you should be aware of. According to 2017 State of Cybersecurity in Small & Medium-Sized Businesses Report:
- 54% of small businesses had data breaches involving customer and employee information in the past 12 months.
- 52% experienced a ransomware attack, and 53% had more than two ransomware incidents in the past 12 months.
- The average cost due to damage or theft of IT assets and infrastructure was $1,027,053, in addition to $1,207,965 for disruption to normal business operations.
Along with direct costs from the attack, like paying a ransom to get your data back, there are numerous regulatory and government fines that can result from not adequately responding to the data breach. This is now also true in Alabama since the state’s passing of the Alabama Data Breach Notification Act of 2018. While this is part of the coverage in a cyber liability policy, under this new law, companies can face charges up to $5,000/ day for not responding to the breach in a timely manner.
Considering Buying Cyber Liability Coverage Now? Here’s how.
When it comes to purchasing cyber liability coverage, you really need a specialist, like our team members at Byars|Wright. As an agent, I have access to 30 different markets that specialize in data breach coverage. Today, this coverage is cheaper than it’ll ever be. Why do I say that? Because it’s been said that there’s not enough protection available in the world for the amount of exposure companies have.
Whether you have a huge, keep-you-up-at-night exposure that requires a million in coverage and high limits, or you don’t really think you have an exposure at all, we’ll work to structure your policy to meet your particular needs. Your relationships, of all sorts, matter. Byars|Wright can help you protect them. Don’t hesitate to reach out to our team; we will review all of your exposures and design a policy that just may be what keeps your business going after being hit with an attack.
At Byars|Wright, we protect relationships. Every promise we make – and we mean every single one – is made on the belief that understanding is essential, trust is earned, and execution is everything. But above all else, Relationships Matter. Connect or contact us today for more information!
