Cyber attacks continue to increase, especially against small businesses. Ransomware with double and triple extortion, breaches, malware, and distributed denial-of-service (DDoS) attacks are all on the upswing. As a business owner, you understand that there is risk to your business, and insurance is one of the ways you can mitigate that risk. Cyber Liability Insurance is one of the critical types of business insurance that can reduce your cybersecurity risk. According to the US National Cyber Security Alliance, 60% of small businesses that suffer a cyber attack go out of business within half a year. There are many important benefits that cyber insurance can offer, including the following four coverages.
Coverage for Data Breaches
Data breaches emerged at the forefront of public consciousness in 2017, when millions of people had their personal information compromised by an Equifax data breach. This incident proved just how devastating and dangerous a cyber-attack can be — and just how skilled attackers are, too. If a massive company like Equifax is vulnerable, how can small businesses defend themselves? Luckily, cyber insurance can offer coverage for data breaches, including the costs of litigation, recovery, and identity theft.
Reimbursement for Business Loss
In addition to compromising sensitive information, cyber-attacks often interrupt business and cause lost revenue. An effective cyber insurance policy will insulate a company from these costs and provide reimbursement for any income that was lost due to a cyber attack. According to a report by IBM and the Ponemon Institute, the average cyber attack cost for businesses with fewer than 500 employees is $2.98 million, and the average cost per breached record is $164
Defense Against Cyber Extortion
One of the most pernicious forms of cyber attack is the increasingly common ransomware. This kind of attack has seen a sharp rise in popularity in recent years, and indeed, it’s an effective tool for cyber criminals to disrupt targets’ business and achieve direct financial benefit from their attack. Ransomware works by encrypting the target’s data files and demanding payment in order to regain access. Some cybercriminals double down on the extortion by exfiltrating your data and threatening to publish your data if the ransom isn’t paid. Cyber insurance offers an effective defense against these types of attacks, though, by allowing businesses to recoup the costs associated with cyber extortion.
Forensic Investigative Support
After a cyber attack, it’s vital that a company launch a thorough investigation and identify the source of the vulnerability. In some cases, it may be the result of compromised credentials, or perhaps a business falls prey to a phishing email. No matter what the cause of the attack is, though, it’s imperative that a business rectify the problem and implement appropriate cybersecurity strategies so that it does not happen again. To this end, a cyber insurance policy should reimburse any costs associated with a forensic investigation of the attack. Businesses may also benefit from a policy that provides additional investigative support.