Get Cyber Insurance Quotes Before Cyber Attacks Get You
Cyber attacks make headlines all over the world. With bolder and more prominent attackers, a business’s need for cyber insurance or “data breach” coverage is bigger than ever.
While it is a hot coverage that some agents and companies try to sell, small and medium-sized businesses haven’t caught up yet. There are a few reasons why there has not been a widespread embrace of this insurance. For the next few moments (or however long it takes you to read this), we dispel a few myths about your cyber or data breach exposure.
Hopefully, you will see the importance and gain the realization that this coverage is something to review with your agent or broker. (Which is something we encourage you to do in our disclaimer page.)
Myth #1: Only Bigger Companies Need Cyber Insurance
This is a wrong and misguided perspective to have, as all businesses are at risk of a data breach. Not trying to make you feel bad about it, but whatever gets the point across. If your business collects and electronically stores payment information and/or employee personal identifiable information (e.g. Social Security Numbers), that’s data which can be breached.
In fact, cyber criminals know that many small business owners feel this way. Some are making a point to attack the little guys in commerce knowing that they won’t have as many roadblocks in the way. Reportedly, 43 percent of cyber attacks through 2016 went after small businesses.
Myth #2: Cyber Insurance Helps You Only After Outside Attacks
In a number of cases, the person who hacks you and steals your data is doing an inside job. Imagine that you’re running a small restaurant that accepts credit cards. Now, imagine that a disgruntled employee is writing down this information, number, three-digit code, name and all. If a customer were to have their identity stolen, your business is in the crosshairs.
Myth #3: I’m Careful; It Isn’t Going To Happen To Me
Ask Target and its affected customers how they feel about that. Ask any of the businesses crippled by the WannaCry cyber attack in May 2017.
Target’s breach started because an HVAC contractor working for them had a vulnerability in their own system. This opened up an avenue for hackers, and then said individuals breached the store’s data. The cost to them was about a billion US dollars, from notification costs to upgrades to privacy remediation expenses.
As for the 2017 cyber attack, it was designed to find all computers on a network with a specific vulnerability. The virus acted like a heat-seeking missile and spread around the world. Some of these big organizations like the British National Health Service and FedEx were probably very careful, too. Not careful enough. If it can happen to one of the big boys, it can happen to a one-man operation.
Why You Need Cyber Insurance
When a personal identifiable information breach occurs, the law requires action. Most American states require that you notify the government of a breach. Almost all states and territories mandate notification of the individuals whose information was stolen. All of this is at your expense, unless you have cyber insurance to help after a breach.
Add this cost to potential suits you sustain and privacy remediation expenses, among other things, and the cash stacks up fast. As of last year, the estimated cost per record stolen was $158. If your accounting firm, for example, has just 1,000 records breached, that’s a possible loss of $158,000. For some companies, this is a devastating event.
A good cyber insurance policy provides a variety of coverages. This includes, but is not limited to, first-party liability (e.g. notification expenses, ransoms) and third-party liability (e.g. privacy infringement or undue care lawsuits).