Why Every Small & Mid-Sized Business Should Not Ignore Cyber Liability Insurance
If you’re already running a business, you’ve probably had a fair share of sleepless nights. As Murphy’s Law aptly states, “If something can go wrong, it will, and usually at the worst time.” While we can’t live our personal or work lives completely adhering to Murphy’s adage, we do have to remain vigilant in protecting ourselves and the businesses we operate.
Most businesses, as well as the customers they support, require certain types of professional liability insurance. The most predominant, perhaps, being Errors and Omissions insurance, which protects companies, their workers, and other professionals against claims of inadequate work or negligent actions. Today, in the ever-connected world of business, technology-centric insurance is quickly becoming one of the must-have coverages every business should consider.
While most people think that the majority of breaches are focused on large enterprises, the truth of the matter is that small to medium-sized businesses often are targets of cyber attacks since they are viewed as being “soft targets.” As a result, smaller businesses often bear the brunt of these attacks and in addition, do not always have the IT support required to handle them.
Learn More: As Ransomware Attacks Escalate, Here’s How Municipalities Can Prevent, Detect and Recover
Words like “ransomware”, “phishing” and “social engineering” have been part of countless articles we read about major corporations having their networks breached and pillaged for data. Chances are, your existing general liability coverages may not protect you from the seemingly infinite amount of cybersecurity threats your business could face. The fear of having your or a customer’s data stolen is really only the tip of the iceberg. Claims against you from customers affected by a cyberattack may actually surpass the problems that arise from the breach itself. You probably already have an IT team working to protect your physical and software-based IT assets, however, what more can you do to bolster your safety?
Cyber liability insurance first appeared in the 1990s and has increasingly grown in importance. Today, it is more important than ever to make sure that having a cyber liability policy is at the top of your to-do list.
Cyber Liability Insurance can help protect your business from major expenses, business losses, and regulatory fines and penalties if your business ends up being attacked. Most general liability coverages do not protect a business from these threats, and as a result, having a specific policy for cybersecurity is becoming increasingly important.
Typically, when we think about insurance, we envision a silo of cash set aside to help cover the costs of whatever catastrophic mishap occurs. Equally as important as the monetary coverage is the ability to adequately respond to a cybersecurity event, including communication plans in place to inform, subdue or take action for or on behalf of the customers affected. Cyber liability Insurance helps with all of that. In the event your network or computer systems are jeopardized, these plans can protect your business and customers.
Learn More: Best Practices to Fight Phishing & Strengthen Cybersecurity in COVID-19 Era
As with any liability insurance, cyber liability policies can differ greatly and taking the time to examine which is best for your business may require professional consultation. As with all new threats, it is only a matter of time until policies are created to combat them.
In addition to having strong security protocols and IT support, cyber insurance can be useful when it is combined with a layered approach. That approach often includes an IT Managed Service Provider (MSP) that can help safeguard you in advance of a cyber-attack and help you mitigate the damage if it occurs.
Adding cyber liability insurance to your arsenal of protection can provide added peace of mind to business owners, who might otherwise bear the brunt of having to pay for hardware and software, etc. A great place to start this process is with an experienced IT security firm who can begin by conducting a cybersecurity audit, alerting you to possible gaps in your business.
While cyber liability coverage is still very much an evolving area of insurance, the right policy, along with the insights of an IT Managed Service Provider can provide you with the framework for ameliorating any negative repercussions to your finances and your company’s reputation that can result from a cyber-attack.
Let us know if you liked this article on LinkedIn, Twitter, or Facebook. We would love to hear from you!
