The most important insurance coverage for your small business is cyber insurance. You need cyber coverage if you do any business digitally or have access to customer data, emails, sensitive info etc. Data breaches are not limited to large corporations. Research shows that cyber attacks are completely random. Any size business is exposed to this risk. Don’t make the mistake of thinking that your general liability insurance covers cyber exposure. The two are totally separate risks. So, what does cyber insurance cover? Cyber insurance coverage helps your business in 3 main areas: data breach, third-party data, and ransomware/extortion.
Insurance does not prevent data breaches from happening but it will help you with remediation and data recovery costs. Grange Insurance reports that the average cost in 2015 to recover one lost or stolen confidential record was $154. That adds up very quickly for a small business! That cost does not include the costs to notify clients of a data breach, possible penalties, legal defense or PR to protect your business reputation after the breach. Cyber insurance helps with these expenses and getting the plan in place and executed to resolve data breach and loss of client trust.
Some small businesses outsource the handling of sensitive data to a third party. Because the third party is handling the data, the business owner assumes they are not responsible for data breach but this isn’t true. Third-party involvement doesn’t totally remove the business from being affected or involved in the settlement if that information is ever lost or stolen. It is important for the small business to carry it’s own cyber insurance coverage to avoid gaps in protection.
Ransomware & Extortion
Hackers install malware on your devices and demand a payment to remove it. You may have to initially comply but cyber insurance coverage helps with the cost to remove the malware.
Some insurance companies offer business interruption coverage. Business interruption insurance covers the loss of income that a business suffers after a disaster related closing.
Cyber insurance can be purchased as a stand alone policy. Most insurance companies designed for small businesses have options to add it to your business owners policy. Bundling coverage in this way can often save on cost. Bradshaw & Weil, Inc. has a few different carriers that offer this coverage. If you are concerned about your cyber coverage or want to look into purchasing cyber coverage then contact us today. For additional information about Grange Insurance and the cyber coverage they offer through our agency click here. For more information on insurance for your small business click here.