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If your business collects and retains data or uses technology in other ways, you need to be prepared for the possibility of a cyber-attack. Such attacks can come with serious consequences. One research paper reveals that the cost to the average small business that suffers a cyber-attack can exceed $5 million. Most small businesses would be unprepared to absorb losses at such scales. What they need is cyber insurance coverage to help recover from the effects of a data breach.
A cyber policy can help a business deal with the costs involved in getting back on track after a cyber-attack. The costs that arise from business disruption, forensic investigations, equipment loss and the hiring of lawyers can be considerable.
What follows are the four different ways cyber insurance can help your business meet expenses following a data breach.
Whether your company's data is stored on-site, at a separate data warehouse or in the cloud, your business will likely be held responsible when protected health information or personally identifiable information gets into the hands of criminals.
It's important for businesses to retain only as much information as necessary, and to fully document where exactly they store customer information. In the event of a breach, cyber insurance can pay to remedy the situation. It can also pay for the costs that a business must accept to comply with regulatory requirements.
The loss of information technology devices
Company-provided phones, tablets, and laptops need to be taken outside the workplace and can be physically stolen. They can also suffer data breaches when connecting to other networks. While there is no way to guarantee the prevention of theft, businesses can protect their data by avoiding the practice of storing critical customer data on mobile devices, and through implementing adequate password security. Cyber insurance can pay for the loss of devices, and for the expenses that may arise when complying with legal investigations.
The costs involved in notifying customers
Notifying customers of a data breach that compromises their data can be expensive. Businesses need to retain a law firm and an incident breach response company to perform the work needed. According to one study by the Ponemon Institute, customer notifications alone, in the average business data breach incident, can end up costing close to $2 million at the average individual business. Cyber insurance pays for these costs.
The costs involved in investigations
Forensics experts are usually called in when a data breach occurs. They investigate to determine what kind of customer information, if any, has been compromised. Cyber insurance policies help businesses handle the expenses involved. They also help businesses meet any additional expenses that they may need to provide for getting back on track.
Small businesses are not immune to data breaches. They are commonly targeted by hackers and other cyber-criminals. When a business lacks cyber insurance, it can be caught unprepared in the event of a breach. Finding the resources to deal with the expenses arising out of a data breach can cripple a small business. Cyber insurance can help businesses prepare for the expenses involved in mounting a response.
CRI executive director Todt, who led the 2016 Presidential Commission on Enhancing National Cybersecurity, said: “For malicious actors looking for vulnerable targets, small businesses remain a primary target, particularly during the Covid-19 pandemic. According to a new survey of 400 small business owners, conducted by the Cyber Readiness Institute (CRI), 89 percent of small businesses have moved to a remote workforce during COVID-19 stay-at-home orders. Cybercriminals are targeting small businesses.
Cyber insurance is very affordable. Reach out to our knowledgeable team to learn more today.