Does Your Business Face Cyber Liability Risks?

Many people believe that large companies face the greatest cyber liability risks—a belief that’s reaffirmed each time a major corporation’s data breach makes headlines. But, it’s actually startups and small businesses that are the most vulnerable. person typing on laptop

Why? Thousands of these businesses possess sensitive customer information, such as credit card numbers, medical records and/or Social Security numbers, which are all valuable to cyber criminals. And, because smaller businesses typically have fewer resources, they tend to have fewer security measures in place to protect customers’ personal information.

Hackers are perhaps the most commonly thought of security threats, but they’re not the only danger employers need to watch out for. A stolen company laptop, a document that doesn’t make it into the shredder or unauthorized access by a vendor can all lead to data breaches and compromised information. If a data breach does occur, it could rock the financial stability of your business, since these situations often cost tens or hundreds of thousands of dollars to resolve. And that’s not even counting the intangible reputational costs.

But you don’t have to face the risk of cyberattacks alone! Cyber liability insurance is designed to protect a business from the expenses associated with a data breach. What does this mean? In short, a data breach doesn’t have to bankrupt your company. It helps cover the immediate financial burdens, so you can focus your attention on cleanup efforts and bolstering your cybersecurity.

What does cyber liability insurance cover?
Cyber liability insurance doesn’t cover everything, but it can make a huge difference during a data breach. Typically, a cyber liability plan can cover:

Digital forensic services
Customer notification and identity theft monitoring services
Public relations and good faith advertising to repair your image

Legal fees and settlements

There are two primary types of cyber liability insurance:

First-party coverage—Insurance that covers immediate customer and business needs.
Third-party coverage—Insurance that covers legal needs.

You can choose which coverage you wish to purchase or select them both. Regardless of which coverage you select, the best thing you can do is implement protocols designed to prevent data breaches in the first place. Some of these protocols may include the use of passwords distributed on a need-to-know basis, installing secure firewalls, setting up a virtual private network (VPN) connection for remote access and thoroughly training employees on the best practices associated with handling sensitive information.

Reach out to your insurance agent today to learn more about protecting your business from cyberattacks.

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