It’s hard to ignore the media coverage regarding data breaches, but many companies don’t think it’s a risk that could affect their business. It’s something that happens to huge corporations, not a small to medium-sized enterprise.
Multitude of Threats
Criminals are very inventive and discover new ways to access valuable data every day. The threat has grown exponentially to the degree that the FBI now includes the top hackers on a Cyber Most Wanted list.
Symantec’s Internet Security Threat Report 2018 notes mobile malware variants increased 54 percent in 2017 alone. Juniper Research also predicts more than half of all global data breaches will occur in the U.S. by 2023.
Small Business Primary Target
Besides being the number one target of data breaches, small business is the most likely target. Verizon’s 2018 Data Breach Investigations Report found 58% of malware attacks were on small business, not large corporations.
Small businesses are the primary target for hackers, because they typically have fewer resources and don’t usually have a dedicated IT team either. Consequently, they’re easy picking for criminals. However, ignoring the risk certainly doesn’t make it disappear.
Data Breaches Cost A Bundle
A data breach is very damaging to a small or medium-sized business. It severely impacts cash flow and profit margins and can bring operations to a halt.
Additionally, you face data and customer loss, regulatory fines, legal fees, and you’ll also pay for a forensic consultant to discover the weakness in your system or procedures to prevent it from happening again.
Each state requires you notify your customers or third-parties affected by a data breach, too. It’s a lengthy, costly procedure and many companies also offer free credit monitoring services to try to salvage their business reputation.
Kaspersky also reports a cyber incident includes emergency improvement costs for infrastructure and software (average $193,000), increased insurance costs and lower credit ratings due to reputational damage (average $180,000), and post-breach security-awareness training (average $137,000).
You Can’t Prevent Hacks
Technology alone can’t protect your company from a data breach. With so many threats and players constantly finding new methods, no antivirus or malware program can totally protect you from data breach.
However, you can encrypt your data and train staff to minimize your risk. Statistics also show the quicker you spot a data breach, the less it costs. An incident response team can help you lower the current time to resolve a breach from 69 days, but you’ll still experience financial loss unless you add an extra layer of protection.
Cyber Liability Insurance
Cyber liability insurance offers you financial protection from losses caused by data breaches and other cyber events. Your policy may protect you from first and third-party liability, including direct company losses such as data loss or damage and third-party claims if a client sues you.
A cyber liability insurance policy may also cover you for lost income s and extra expenses resulting from a covered peril. Expenses from cyber extortion, notification costs, and crisis management costs are also covered. Some policies also offer financial protection if you’re sued for copyright infringement, defamation, slander and libel.
It doesn’t make sense to pay for a broad policy with extras you don’t need. Plus, broad policies may not address your greatest vulnerabilities. For instance, those in the financial or healthcare industries need very specific protection. Your agent can tailor your policy to your industry and needs.
No business can afford to ignore cyber threats. Cyber liability insurance is a reasonable, affordable commercial insurance policy that offers the extra layer of protection your company needs. Reduce your risk exposure and do what you can to prevent data breaches before you become a victim.
