Does Your Small Business Have Cyber Liability Insurance?
What do I mean by Cyber liability insurance?
Cyber liability insurance protects small businesses from the insurmountable costs of a data breach or malicious software attack. It covers expenses such as customer notification, lengthy credit monitoring, legal fees, fines, and damages. What type of small business need cyber liability insurance?
If your business handles sensitive information, you need a cyber policy!
Cyber liability insurance is a must-have policy for business’ that handle credit card numbers, personal information, or work in / store information in the cloud.
Hackers often target retailers, healthcare, and financial service providers, but any business can have a data breach, even small mom-and-pop operations!
With all the advanced technology available to businesses these days, many are going to online ordering, automatic payments, and paperless accounts. While these are convenient options for consumers, they are also opportunities for bad guys to virtually “break in” and steal information. The average data breach can cost more than 1 million dollars in fines, fees and legal costs and over 50% of small businesses that suffer one have to close their doors within 6 months of the breach.
SO WHAT TYPE OF COVERAGE DO YOU NEED?
There are two types of cyber liability insurance:
1. First-party coverage helps to cover expenses when your network or systems are breached, and/or your data is stolen.
2. Third-party coverage can offer protection when a client sues your company for failing to prevent a breach at their business.
So let’s break it down!
First-party cyber liability insurance can cover:
• Cyber extortion payments
• Hiring an expert to investigate the breach and help with regulatory compliance
• Notifying any affected customers
• Credit and fraud monitoring services provided to the victims
• Crisis management and public relations
• Business interruption expenses, such as the cost of hiring additional staff, renting equipment, or purchasing third-party services
Third-party coverage is for claims made against your business by the affected parties. It provides liability coverage if a client blames you for failing to prevent a data breach or cyberattack at their company. This could include the cost of legal defense and settlements.
This insurance is recommended for tech professionals, such as an IT consultant, software sales company, website designers and even app creators! Basically, anyone who makes software recommendations to a client. It becomes important If the software they sell / recommend is later breached and data is compromised, third party coverage will help cover the cost of a lawsuit.
Third-party cyber liability insurance can cover:
• Legal defense costs
• Settlements if you and the client settle out of court
• Judgments you’re legally obligated to pay after a data breach
• Other court costs
Most retail small business need First-Party coverage, but it is always best to meet with your insurance agent in person to review the specific needs of your company and it’s clients information.
So, what will it cost to be covered?
Cyber liability insurance can be an affordable option for a small business. Several factors affect policy costs, including:
• Amount of sensitive data handled
• Your industry
• Coverage limits
• Number of employees
On average, the median cost of cyber liability insurance is $140 a month for a small business. This is a small price to compare to the endless bills, fees and fines associated with a data breach. For specific pricing please call our office at 618-523-4553.
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