In 2020, cybercrime cost the global economy nearly $1 trillion. About 28 percent of data breaches involved small businesses. If your business relies on technology for its day-to-day operations, it is important to ensure that you are prepared for the unexpected. In addition to putting in place proper cybersecurity measures, you should also have cyber insurance. The good news is that the policies can be tailored to meet your specific needs. But why exactly should you purchase cyber insurance?
Here’s what to know:
Cybercrime Is on the Rise
The widespread use of the internet and technology has exposed businesses to a wide range of digital risks. Today, cybercrime is big business, and companies of all sizes are vulnerable to attacks. Malicious actors are constantly looking for new ways to gain unauthorized access to computer networks. With new crimes emerging every day, data breaches are a question of when, not if. Cyber insurance can offer protection against these technology-related risks.
Data Is a Critical Business Asset
Data is one of the most important assets your business has. However, there is always the risk that the information will get lost, damaged, or destroyed as a result of malicious online activities. As a business, you have the responsibility to keep sensitive third-party data secure.
With cyber insurance, you will have comprehensive cover for recovering or recreating data that has been altered or stolen. This helps to mitigate the damage to ensure your business continues to thrive after a security incident.
Data Breaches Can Be Costly
The financial impact of a cyberattack on your business can be severe. Depending on the nature and scope of the attack, you may incur costs relating to investigating the incident, cyber-extortion, business interruption loss, compensating the affected individuals, and penalties. These costs can affect the financial health of your business.
Similarly, claims could cost you a significant amount of money in legal fees, court costs, and fines. The right insurance coverage will help pay for these expenses and cover the costs of repairing or replacing compromised or damaged computer systems and devices.
Compliance with Breach Notification Laws
Complying with breach notification laws is expensive and time-consuming. Businesses in various jurisdictions are required by law to notify all potential victims when they lose sensitive personal data. Failure to do this can result in hefty fines and penalties. Providing such written notification will also help to protect both your brand and reputation. Cyber insurance can cover the costs of notifying individuals affected by a data breach, effectively enabling you to comply with the applicable laws.
Incident Response Services
Your existing insurance policies may not cover the losses associated with a cyberattack. A cyber insurance policy covers the various unique risks of cybercrime to ensure your business is adequately protected. Depending on the policy you choose, you may also get specific incident response services. This includes forensic support to help you determine the cause and scope of a breach, so you can contain the attack and improve your security posture.
Your Reputation Matters
Cyberattacks can damage your business reputation and erode the trust that customers have in you. Recovering from cybercrime is expensive. To undo the reputational damage occasioned by a cyberattack, you may have to invest in public relations campaigns as well as identity theft and credit monitoring services. Cyber insurance can cover these expenses to help you manage your reputation and regain customer trust.
A Data Breach Can Occur When You Least Expect It
There is no telling when your business will suffer a cyberattack. This is why you need to take the necessary steps to ensure you will survive the associated disruptions. Purchasing cyber insurance is one of the ways to prepare your business for the unexpected.
As cybercrime becomes more widespread and sophisticated, your business should be protected. At Starke Agency, we are an insurance brokerage and risk management company. We offer the right solutions to help meet your insurance needs. Contact us today to get a quote for cyber insurance.