Cyber Liability Insurance: What It Is and Why Your Business Might Need It
No matter the size, shape, or scope of your company, cybercrime is a nefarious reality of modern business. Between ransomware attacks targeting hospitals and data breaches at credit companies, virtually no industry remains immune to threats posed by hackers, data thieves, and other malicious actors.
These risks can be felt by any organization around the world and are particularly dangerous for small businesses. As noted by a survey conducted by the U.S. Small Business Administration, 88% of small business owners feel vulnerable to online attacks — and for good reason. According to the FBI’s 2020 Internet Crime Report, cybercrime accounted for $4.1 billion in losses, with $1.8 billion alone attributed to business-related email schemes.
From phishing scams to ransomware, cybercrime can take many different forms and leave your business crippled from the sheer loss of data, trust, and integrity. And with the pervasive nature of zero-day attacks, which are often able to evade even the most effective online defenses, the best-laid IT strategies may still not be enough to mitigate the effects of a devastating attack.
Cyber liability insurance has become an increasingly important level of protection for small and medium-sized businesses. By defending a company against interrupted business or stolen data in the event of a hacking event or data theft, organizations can help ensure that they’ll be able to withstand recovery efforts and potential legal actions.
What is cyber liability insurance?
Cyber liability insurance is a specialty insurance product designed to protect businesses in the event of an attack on IT infrastructure, including the destruction of data, denial of service attacks, or extortion. As a policy that’s typically not included with standard commercial liability insurance, cyber liability insurance can greatly improve the ability of a company to recover from the aftermath of an online attack.
Coverage for cyber liability insurance varies based on the policy but can cover a wide range of attack-related scenarios, including:
- Data breaches, which can result from employee theft, misplaced equipment, or hacking.
- Business interruption, which can be the result of a denial-of-service attack or from having to keep your business closed while restoring equipment.
- Extortion, like that seen in a ransomware attack.
- Public relations issues, such as working to restore a company’s reputation.
- Legal issues, such as fines from government organizations or enacting credit monitoring services for affected customers.
Any of these issues can individually cost a small business a serious amount of money, and in the case of a significant attack, any and all of these scenarios can come true, translating to serious costs and potential legal liability.
That’s not to say cyber liability insurance covers every possible attack-related scenario — property damage, bodily harm, and terrorism-related cyber activities can often be excluded from the typical cyber liability policy. But for a small business without enterprise-level IT resources, cyber liability insurance can still serve as a serious layer of protection against significant attacks.
Why does your business need cyber liability insurance?
If your company handles sensitive customer information, runs mission-critical IT equipment, or simply can’t afford any interruption of service, cyber liability insurance is a business imperative. Not only can an online attack grind work to a halt at a moment’s notice, but it can also leave companies exposed to significant legal jeopardy.
By obtaining cyber liability coverage for your business, you’ll be able to better endure the costs and headaches associated with a major attack and help ensure that the business of business gets back to normal as quickly as possible.
DWD Technology Group helps companies evaluate and implement essential IT management solutions. Drawing on deep experience in offering end-to-end IT and cybersecurity solutions, our technology experts can help any small or medium-sized business find the right online security solutions to mitigate the risk of dangerous attacks. For a free cybersecurity assessment, contact us today!