Why Cyber Liability Insurance Is a Must-Have for Small Businesses?
Small businesses often use technology to implement marketing strategies designed to attract more customers. These businesses are also generally compatible with online transactions. Relying so heavily on technology is risky, especially for small businesses that don’t have the proper infrastructure to protect themselves if a cyberattack occurs. Here’s a look at why small business owners should add cyber liability insurance to their business insurance coverage.
Significance of Cyber Liability Insurance
Cyber liability insurance protects your business against potential breaches involving sensitive data. Hackers are constantly looking for ways to infiltrate systems and steal credit card info, social security numbers, and other personal information. Cyber liability insurance assists with repairs and recovery costs, as well as possible legal fees.
Types of Cyber Attacks
- Data breaches occur when hackers gain access to personal information
- General computer attacks happen when hackers attempt to compromise your network or system
- Cyber extortion is another serious cyber attack where thieves may demand that you pay a ransom payment, or things will get worse
Cyber Liability Insurance Coverage Inclusions
Cyber liability insurance handles potential damages that may occur as a result of a cyber breach. The policy handles costs related to:
- Data recovery and investigative services. The policy covers the costs of recovering your data following a breach or identity theft
- Any impacted parties decide to sue your business due to the cyber attack. The policy covers your legal fees and potential settlement costs
- Ransom payments that you have made
- Lost income while your network is being restored
- Regulatory fines
- Potential public relations costs
Businesses That Need Cyber Liability Insurance
You must purchase cyber liability insurance if your business stores or processes sensitive information such as addresses, social security numbers, credit card information, or medical records. Restaurant owners, accountants, consultants, contractors, and real estate agents, among others, are encouraged to buy cyber liability insurance.
Factors That Determine Cyber Liability Insurance Cost
The cost of cyber liability insurance depends on multiple factors, including:
- Your company’s exposure to cyber risks
- The amount of coverage your company needs
- Your total revenue
- Your claims history
- The strength of your network
You have the option to add minor cyber liability coverage to an existing policy or purchase a more extensive coverage as a stand-alone policy.
Difference Between Cyber Liability Coverage and Data Breach Coverage
Data breach insurance covers your business if sensitive financial data is compromised. You can also add extra coverage to your data breach insurance to replace any lost income as a result of your network going down. Cyber liability insurance is for larger businesses that need more extensive cyber coverage.
How Is “Errors and Omissions” Insurance Different from Cyber Liability Insurance?
Errors and Omissions insurance is a form of professional liability coverage that handles any damages that occur as a result of errors made by one of your company’s services or products. Cyber liability insurance differs because it covers the costs associated with a breach from outside of your company.
Contact Little and Sons Insurance Services
While researching cyber liability insurance, remember that the amount of coverage you need depends on the level of risk to which your business is exposed. Contact the team here at Little & Sons Insurance Agency, and we will help you find the right policy.