Cyber Liability Insurance: A Small Business Necessity
By Rebecca Liloy
Imagine your business’ website has just been hacked. You are now unable to access your website, take and process orders, and collect payment from customers. That is just the beginning of what could be a small business owners’ biggest nightmare. The business’ entire customer database is now exposed, or even worse, sensitive employee information such as names, dates of birth, and social security numbers could have been tampered with.
Data is a company’s most valuable asset. Data breach can represent catastrophic losses for a company. Statistics show that 40% of cyber attacks are against companies with fewer than 500 employees, and 60% of those affected never recover. The risk here is not losing information, but hurting the business’ brand and reputation.
Big corporations have dedicated IT and Public Relations teams to respond in the event of a loss. Take Sony and LinkedIn as an example. Their data breach crisis resulted in millions of dollars. The average cost per customer information exposed is $214. Small businesses and tech start-ups generally operate on low budgets and are unable to maintain the adequate staff to respond in the event of a crisis. Cyber liability may be the cost-effective way for small businesses to protect themselves from data breaches. Below is a list of how cyber liability can help you in the event of a crisis:
- Coverage for damage to third parties caused by a breach of network security.
- Coverage for costs associated with rented/leased equipment, use of third party services, additional staff expenses or labor costs directly resulting from a covered cause of digital assets.
- Coverage for any expense resulting from violations of federal privacy protection laws and regulations.
- Reimburses the cost to notify and provide 12 months of credit monitoring services.
- Coverage for acts of employees causing intentional damage to the Insured’s network.
- Public Relations expenses, including legal expenses, credit monitoring expenses, postage, and advertising costs.
For more information about cyber liability, please give us a call at (516) 431-9100.