The Importance of Cyber Liability Insurance

How does your small business collect and store sensitive, confidential customer data and financial information?  If you said on your laptop, backed up to the cloud and accessible with your smartphone or tablet, you are not alone.  Your business, like most in this increasingly cyber-dependent age, is susceptible to a data breach.  Did you know that 1 in 3 documented data breaches occur in businesses with less than 100 employees?1  Additionally, 60% of small businesses close their doors within 6 months following a cyber attack.

Cyber attacks or data breaches are not solely the work of criminal hackers unleashing malware or malicious code into your system.  Data breaches can be accidental whereby your own employee or contractor connects to your server through a smartphone with a virus or malware on it resulting in hundreds of records, including credit card information, being stolen.  Regardless of the source of the breach, once your data is breached you are responsible and will incur costly expenses to restore lost data and notify affected customers as well as incur the cost to repair your reputation.

Cyber liability insurance is designed to protect a business in the event of these types of data breaches and continues to evolve to meet a business’s varied needs.  The coverage can now be purchased ‘a la carte’ meaning you, as the business owner, can purchase the specific kind of coverage you need the most while remaining within your budget.

Purchasing Cyber Liability Insurance

When purchasing coverage, you will be asked to complete an application in order to assess your level of risk.  You will be asked questions such as:

  • What type of sensitive information do you collect?
  • How is it stored?
  • Do you control access to sensitive information?
  • Do you utilize a firewall and protection software?
  • Do you allow your employees and others remote access to your system?
  • Do you have a written security policy?

Think about how you would answer these questions and ask yourself if it is time to consider purchasing cyber liability insurance.

Any company that stores customer information such as addresses, emails, credit cards and other information is at risk and would benefit from a cyber liability policy. Contact us today to speak to a Small Commercial Insurance Advisor

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1 The Verizon 2015 Data Breach investigations Report (DBIR)

2 2013 US House Small Business Subcommittee on Health and Technology, “Protecting Small Businesses Against Emerging and Complex Cyber-Attacks”

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