(Newswire.net — October 28, 2020) — Cyber risk – the threat of phishing attacks, social engineering schemes, data breaches, denial-of-service attacks and more – is the largest security concern for businesses today. Protecting against that risk requires a comprehensive approach that combines proactive measures such as security training and effective software-based protection with reactive measures such as cyber risk insurance should a breach take place.
The first thing to consider is your approach to guarding against these attacks. However, oftentimes a business’s plans fail to take into account what could happen after a breach. That said, there’s a long checklist of dos and don’ts involved in preventing a breach in the first place.
So you’ve done your best to button up your business against the threat posed by cyber intruders. You’ve deployed the latest and greatest security software throughout your organization such as an endpoint protection solution. You’ve trained your personnel on what to do and not to do when it comes to receiving emails and phone calls and allowing physical access to your network and servers. Yet despite all these precautions, your data is still at risk. In fact, many experts believe that a data breach is inevitable. When the worst happens, it can mean the end of your business. According to an 2018 Inc and Cisco report, 60% of small businesses fold within six months of a cyberattack. Fortunately, however, there’s one more thing you can do to prevent such a breach from putting you out of business: take out a cyber liability insurance policy.
This kind of insurance used to be reserved for only the largest corporations since they alone could afford the astronomical rates. However, those rates have recently come down quite significantly, making this type of insurance a wise investment for small businesses as well as large ones.
Why Cyber Liability Insurance?
Beyond the obvious — preventing your company from going broke due to the inevitable lawsuits — cyber liability insurance also spares you from footing the bill for other costs a company typically incurs after a breach. Investigating how the breach occurred can eat up lots of money, time and human resources. If your breach exposed customers’ sensitive information, you’re going to be on the hook for credit monitoring for each of the victims. If the breach was caused because standards were not adhered to, you may also face government fines. Cyber risk liability insurance can help with all or a portion of these expenses, which could mean the difference between your business continuing or failing.
Taking out a cyber risk insurance policy is also a good way to ensure that you’re utilizing best practices when it comes to data security. Since insurance companies pay out when a breach occurs, it’s in their best interest to see that you are protected against this eventuality as much as possible. Your insurer will be able to fill you in on the latest areas of risk in the cyber realm and can become your partner in mitigating that risk. This kind of cooperation can in turn lower the odds of a breach occurring.
If a breach does occur, you’re going to need an incident response plan. Inc indicates that over 60% of businesses are lacking such a plan. A good cyber risk insurance carrier will not only make sure you have such a plan and that it is continuously updated; they may actually provide incident response experts who can help you investigate the breach and, most importantly, limit the damage.
Types of Hacking Insurance
At this point, there is no ubiquitous name for cyber hacking or cyber risk insurance. In Canada, it tends to be called simply “hack insurance.” In the United States you may see it referred to as “cyber risk insurance” or “cyber hacking insurance.” Whatever it’s called, you should shop around for the most comprehensive plan that won’t break your budget.
Smaller businesses that lack an incident response team may wish to carry a plan that includes this important post-breach feature. Whichever plan you select, you can rest assured that should a breach occur, the aftermath will likely not lead to the failure of your business. In these times of uncertainty, that kind of peace of mind is valuable indeed.
Cyber hacking insurance for small business is now both effective and affordable. Whether or not to avail yourself of this potentially business-saving backup is certainly a decision that merits careful thought. In the meantime, it won’t hurt to initiate a review of your security procedures and response plans to ensure that you are making best use of available solutions to protect yourself before, during, and after a breach.