It is not uncommon for small businesses to bypass cyber-security measures, believing that cyber-crime is reserved for major financial institutions or government organizations. However, small businesses are frequent targets because their websites and databases may have less stringent security protocols.
In many cases, a business is the direct target for a cyber-attack, but not all cyber security issues involve a hacker. Cyber-strikes can manifest from faulty hardware, a corrupted system backup, or even a severe weather event. Regardless of the cause, losing data can put your customers at risk and restoring the information can drain vital resources from your business.
“The most common cyber-crime we see is data being encrypted and held hostage for a ransom,” said Harold W. Soden Jr., insurance and risk management advisor for Oliver L. E. Soden Agency, a Trusted Choice independent insurance agency in Shrewsbury. “Businesses lose time and manpower trying to restore their data or end up spending money to hire a specialist to unencrypt the information.”
Small businesses need to be aware of these three common cyber risks that pose a threat:
- Natural: During severe weather, a lightning strike or power surge can damage or destroy an entire database,
- Human error: Unintentional acts can be as simple as misplacing a laptop containing sensitive client data,
- Intentional: Outside hackers or disgruntled employees can steal or destroy important information.
Businesses that process online payments, or store sensitive client information in the cloud, should consider talking to their agent to learn if general liability insurance will cover the consequences of a data breach. Often times it is insufficient.
“It’s human nature to think ‘It’s not going to happen to my business,’ even though this affects mom-and-pop businesses as much as it does Fortune 500 companies,” said Scott Stanford, owner of the Stanford Agency, a Trusted Choice independent insurance agency in Tinton Falls, N.J.
Beyond protecting data with frequent backups and security measures, cyber liability insurance can give peace of mind to small business owners who may be at risk of losing mission-critical data or who might be sued for failing to keep client information private.
“Cyber liability policies are essential for small businesses and are relatively inexpensive,” Stanford said. “You can get $50,000 of coverage for as little as $200 a year. And, this is an area of insurance that’s growing rapidly in exposure. As more businesses sign up for cyber liability, insurance companies can offer greater coverage for lower premiums.”
Once a cyber-attack takes place, cleanup and recovery can be time-consuming and costly. When shopping for a cyber liability policy, consider one that covers business interruption, notifying customers of a data breach and rebuilding data systems. With the proper cyber liability insurance in place, your business can survive the invisible menace of a cyber-attack.
Since cyber liability insurance is a relatively new product, it is only available through select insurance companies. Working with a Trusted Choice independent insurance agent can help you learn about which products and carriers can provide the coverage you need. Trusted Choice independent insurance agents have the ability to work with multiple insurance companies to find the coverage, and the price, that is right for you. To speak with a Trusted Choice agent about your cyber-security options, visit TrustedChoice.com.
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Cyber security is important yet so many companies just take it for granted until something bad happens to their data. I think that businesses should be more proactive when it comes to dealing with security.