High-profile cyber attacks and data breaches at Sony, Honda Canada, and Target have raised awareness of the growing threat of cyber crime – yet surveys conducted by Symantec suggest that many small business owners are still operating under a false sense of cyber security.
Benefits of Cyber Liability Insurance
When cyber attacks like data breaches and hacks occur, they can result in devastating damage. Businesses have to deal with business disruptions, lost revenue, and litigation. It is important to remember that no organization is immune to the impact of cyber crime. As a result, cyber liability insurance has become an essential component to any risk management program.
Don’t Equate Small with Safe
The majority of Canadian small businesses lack a formal Internet security policy for employees, and only about half have cyber security measures in place. This disconnect is largely due to the widespread, albeit mistaken, belief that small businesses are unlikely targets for cyber attacks. In reality, data thieves are simply looking for the path of least resistance. Symantec’s study found that 40 per cent of attacks are against organizations with fewer than 500 employees.
Attacks Could Destroy Your Business
Large companies are devoting more resources towards data security, making small businesses increasingly attractive targets. The results can be devastating for small business owners. According to Symantec, the average cost of a cyber attack on a small or medium-sized business is nearly $200,000. As a result, nearly 60 per cent of the small businesses victimized by a cyber attack permanently close their doors within six months. Many of these businesses put off making necessary improvements to their cyber security protocols until it was too late because they feared the costs would be prohibitive.
Cyber liability insurance policies are tailored to meet your company’s specific needs and can offer a number of important benefits, including the following:
Data breach coverage. In the event of a breach, organizations are required by law to notify affected parties. This can add to overall data breach costs, particularly as they relate to security fixes, identity theft protection for those impacted by the breach, and protection from possible legal action. Cyber liability policies include coverage for those exposures, thus safeguarding your data from cyber criminals.
Business interruption loss reimbursement. A cyber attack can lead to an IT failure that disrupts business operations, costing your organization both time and money. Cyber liability policies may cover your loss of income during these interruptions. What’s more, increased costs to your business operations in the aftermath of a cyber attack may also be covered.
Cyber extortion defence. Ransomware and similar malicious software are designed to steal and withhold key data from organizations until a steep fee is paid. As these types of attacks increase in frequency and severity, it’s critical that organizations seek cyber liability insurance, which can help recoup losses related to cyber extortion.
Forensic support. Following a cyber attack, your organization will have to investigate to determine the extent of the breach and what led to it. The right policy can reimburse the insured for costs related to forensics and seeking out expert advice. Additionally, some policies can provide 24-7 support from cyber specialists, which is especially useful following a hack or data breach.
Legal support. In the wake of a cyber incident, businesses often seek legal assistance. This assistance can be costly. Cyber liability insurance can help businesses afford proper legal work following a cyber attack.
Coverage beyond a general liability policy. General liability policies don’t always protect organizations from losses related to data breaches. What’s more, data is generally worth far more than physical assets, and it’s important to have the right protection in place when you need it most. Supplementing your insurance with cyber coverage can provide you with peace of mind that, in event of an attack, your organization’s financial and reputational well-being is protected.
10 Ways to Prevent Cyber Attacks
Even if you don’t currently have the resources to bring in an outside expert to test your computer systems and make security recommendations, there are simple, economical steps you can take to reduce your risk of falling victim to a costly cyber attack:
- Train employees in cyber security principles.
- Install, use, and regularly update antivirus and antispyware software on every computer used in your business.
- Use a firewall for your Internet connection.
- Download and install software updates for your operating systems and applications as they become available.
- Make backup copies of important business data and information.
- Control physical access to your computers and network components.
- Secure your Wi-Fi networks. If you have a Wi-Fi network for your workplace make sure it is secure and hidden.
- Require individual user accounts for each employee.
- Limit employee access to data and information, and limit authority to install software.
- Regularly change passwords.