Data breach insurance:
Takes the flak when you're hacked
Cyber liability insurance, cyber security insurance, data breach insurance… They're all names for the same thing – survival.
Business is booming for cybercriminals. Cyberspace is swarming with them. Breaches are getting bigger and everything's at risk.
Sure, you can step up your firm's cyber defense. But until bullet-proof, security software's invented, you're just dodging malicious missiles.
One, wrong click and your clients' confidential data could be kidnapped. Or, your system struck down, forcing business to a standstill.
But it's not the attack. It's the time and money spent fixing the damage, that could kill your business completely.
Cyber liability insurance can take care of these costs and get you expert help. It means you won't stress about breaking the bad news to clients and regulators. Or, legal fees and compensation, if you're sued. Along with your systems and data, your reputation will be restored – plus any profits lost if the attack stopped you doing business.
Think of it as your firm's flak jacket. You can't stop a hack-attack. But with cyber coverage in place, at least you, and your company, will survive.
Why do I need cyber liability insurance?
Do you store clients' data electronically? Use email? Have a website? Do you accept credit or debit cards?
If you answered 'yes' to any of these questions, you're a target for cybercriminals.
And if you're a small business owner, you're even more at risk. Why? Because you're less likely to have tough defenses in place. Which makes you easier to hack.
But don't take our word for it. The stats speak for themselves:
- 85% of data breaches strike small businesses – that's about 4,000 a day
- 60% of small businesses that suffer a cyber-attack shut down within six months.
It's not all about the money, though. Dealing with a cyber-attack takes up your time. Just resolving one, single identity theft takes around 400 hours. That's time better spent on your company.
And did you know that as a business owner, if your personal credit is ruined by identity theft, you may lose access to business loans.
Cyber liability insurance can't protect you from a cyber-attack. But it can give you the expert and financial help to recover from one.
What does cyber insurance cover?
Cyber liability insurance doesn't just cover the time and money you'll spend coping with a cyber-attack. It also helps get your business back on its feet again.
In detail, cyber liability can cover:
- the costs of investigating a data breach
- the costs of telling your customers
- legal fees and compensation costs if you're sued for losing someone's data
- defense costs if you face legal action by local or federal authorities
- payment of regulatory penalties and fines
- the costs of restoring data, systems and your website
- income lost and extra expenses if a cyber-attack stopped you doing business
- credit monitoring for victims of identity theft
- the costs of managing your reputation and customer relationships
How much does cyber insurance cost?
Compared to what a data breach will cost you? Not very much.
Say you're the victim of a hack attack for the first time.
200 PCI records stored in a centralized system were stolen and used fraudulently. You report the breach immediately and tell your customers. They're not happy and take out a class action lawsuit against you. On top of that, the state fines you for losing your clients' confidential data.
Without cyber liability coverage, you'll have to find, roughly:
- $138,000 for the breach to be investigated
- $25,969 to tell your customers
- $266 in fines and penalties
- $27,900 PCI
- $602,068 Class action lawsuit
That's a total of $794,287*. Ouch.
The good news is, liability insurance can cover all those costs for you. For around $1,000 a year.
Worth it then? You do the math.
*These figures are estimated. Actual figures will vary, depending on the circumstances of each, individual incident.