Better Business Bytes: Why invest in cyber security insurance?

While billion-dollar corporations and their very public battles with issues such as ransomware attacks typically garner most of the headlines, small businesses are far from immune to cybersecurity troubles. In fact, they’re just as susceptible as their larger counterparts.

According to Accenture’s Cost of Cybercrime Study, 43% of all cyberattacks target small businesses. But less than 15% of the businesses that fit that description are prepared to protect themselves should their systems get breached.

Password management, system updates, consistent training – those measures may not be enough. Practicing cyber hygiene does better position your business to avoid a cyberattack. But breaches can still happen, and when they do, the fallout is potentially devastating.

Cyber insurance is a form of coverage that helps organizations and individuals remediate issues that arise following a cyberattack. With the number of cybercrimes continuing to rise, pairing consistent cyber hygiene with an appropriate cyber insurance plan is an approach more businesses are taking.

If your data is breached, cyber insurance lessens the amount of time it takes to recover. In many cases, it can also help minimize most of the financial losses incurred.

If you’re considering cyber insurance for your company, or maybe you just want to learn what it is, Better Business Bureau outlines the protections it offers and insight for finding a trustworthy policy:

  • Legal defense: Depending on the severity of the attack, you or your business may need to connect with some legal help. That type of assistance is typically pretty costly. Cyber insurance covers expenses should you need to utilize lawyers to help put the pieces back together following a breach.
  • Lost income: Data breaches aren’t cheap. If your business has to shut down its operations because of a cyberattack, those disruptions can result in thousands or even millions of dollars in losses. You may need to purchase new hardware as well, in case the attack caused permanent damage to some of your systems.
  • Ransom: Should an attacker hold your data hostage until you pay to get it back, that’s considered extortion. Covering costs associated with those investigations is included in some cyber insurance policies, as well as any expenses incurred when recovering that information.
  • Reputation: False information about your company that’s shared online can permanently impact your business’s credibility. It’s why defamation connected to cyberbullying or other forms of online harassment is insured under some cyber policies.

Finding a trustworthy cyber insurance policy may require a bit of leg work. “Cybersecurity is such a dynamic and changing environment, policies this year have changed completely from where they were last year,” says Derek Gabriel, CEO of Ignite Solutions Group, a BBB Accredited IT services provider. “The requirements to get those policies and what those policies will protect has really changed dramatically. So, you really want to work with a specialist.”

Gabriel strongly advises businesses to leverage their current insurance contacts to find someone equipped for the job. Insurance companies that specialize in cyber coverage are becoming more common, too.

Consumers are becoming increasingly knowledgeable on the ways their information can be breached. Adding a cyber insurance policy not only demonstrates to customers that you care about safeguarding their privacy, but it also differentiates you from your competitors.

The FTC has provided a list of questions to help you make the right call when choosing a cyber insurance policy.