What is Cyber Liability Insurance?
Cyber liability insurance is a type of insurance coverage that can help protect a business from losses arising from data breaches, cyber-attacks, and other overarching cyber incidents. Cyber insurance can help a business owner with the following in the event of a covered cyber incident:
- Restoration of data
- Legal fees
- Public relations costs
- Reimbursement of customer losses
Who Needs Cyber Liability Insurance?
The need for cyber insurance has increased over the years and generally should be considered by businesses of all sizes. Cyber liability insurance is especially important for businesses that are more prone to collecting or storing customer data. This could include, but is not limited to businesses that operate online, process credit cards, orhandle personal information such as Social Security numbers.
Small businesses seem to be targeted at an increased rate when compared against larger businesses. Forbes recently published that a study from a cloud security company called Barracuda Networks showed small businesses are three times more likely to be targeted by cybercriminals than larger companies. This study went on to find thatan employee of a small business with less than 100 employees will experience 350% more social engineering attacks than an employee of a larger enterprise.[1]
How Much Does Cyber Liability Insurance Cost?
The cost of cyber liability insurance can vary on several different business factors. These could include including the size and risk profile of the business, the type of data that is being stored, and more. Accordingly to Insureon, a leading online insurance agency, the average cost of cyber insurance for their customer is $145 per month[2].It’s important to get quotes from several different insurers to get the best possible rate.
Why Do You Need Cyber Liability Insurance?
It’s important to consider cyber liability insurance for your business. A few primary reasons include:
- Help protect assets: In the event, your business is hacked, it exposes you to potential losses. Cyber liability insurance can help to pay for the damages and protect your assets.
- Help comply with law: Depending on the state a business resides in; a business may require cyber liability insurance to obtain or maintain a business license.
- Help protect reputation: A cyber-attack can damage the reputation of the business impacted. Cyber liability insurance can help to protect your reputation and your business.
In addition to cyber liability insurance, it’s important that your business is vigilant to help prevent cyber-attacks from occurring in the first place. There are several procedures businesses can do to help mitigate these cyber threats from occurring, including:
- Educating and training employees on how to spot and report scams.
- Implementing security measures such as antivirus software.
- Keeping all business software up to date.
- Having a plan and process in place in the event a data breach or cyber-attack occurs..
By taking these steps, businesses can help to reduce their risk of being hacked and can protect themselves from the financial and reputational damage that can result from a data breach. Despite this, cyber-attacks can still happen which can leave a small business vulnerable.
Disclaimer
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[2] https://www.insureon.com/small-business-insurance/cyber-liability/cost